Building No-Debt and Low-Debt Businesses

The startup world is too obsessed with how much capital a company can raise. Fundraising often becomes a measure of success in itself, at the expense of asking how efficiently a business can turn revenue into sustainable growth.

We are interested in promoting the idea of businesses that proactively target zero or minimal debt. This does not mean we are against borrowing. Debt can be useful, even essential, for many businesses.

Some founders are privileged enough to have access to capital to start and scale a business. Some businesses can manage to fund their own expansion from revenue. But not all founders and businesses can have such growth trajectories. So, borrowing by itself is not the problem.

The problem is unsustainable borrowing and growth that depends primarily on continually taking on more debt. We are against unsustainable loans.

What we want to promote is a deliberate reluctance to pursue primarily debt-fuelled growth. Businesses should ultimately be judged by how efficiently they can turn revenue into durable, financially sustainable growth.

To be clear, zero debt here does not mean zero liabilities on the balance sheet at every point in time. It means avoiding structural dependence on debt and aiming to settle debts as promptly as the business can reasonably afford, rather than allowing them to accumulate faster than the business can sustainably repay them or depending on them as a permanent source of financing.

A business built around this principle can have a fundamentally different relationship with investors, employees, and customers. It has stronger incentives to understand what actually works and to build a productive economic model that can survive without continually increasing debt.

This matters now more than ever. Countries, institutions, companies, and individuals are carrying enormous amounts of debt, much of it increasingly difficult to sustain. We need businesses that don't magnify this problem.

We want to see more businesses that grow because they work, not because they can keep borrowing.