Session 3 was a discussion on Burton Sensors, Inc.

During the class discussion sir explained about the

differences in using either equity or debt for raising funds for a business. This prompted me to ask
why start-ups usually go the equity route instead of debt route.

Sir replied that any bank looks for two things in a business before lending – cashflow and assets. A
start-up is usually deficient in both and hence finds it extremely difficult to raise debt. Hence it has
to go down the equity role to raise funds for the business.

This was my contribution to the discussion in the class.