$100 Million “Innovator’s Credit Fund” Aims to Ease Startup Cash Crunch

Getting funded is the first step toward every startup entrepreneur’s dream. But while receiving an infusion of cash from a venture capitalist or angel investor is certainly a good thing, it doesn’t necessarily mean your company’s money problems are over. Even venture-funded startups can’t afford to divert scarce cash to everyday purchases, so one big tech vendor is trying to step into that credit void.

Startup businesses, particularly those that are growing fast, are in a constant state of acquisition. Hire someone? They’ll need equipment and a place to sit. It costs money to attract customers and clients, and even more to serve and retain them.

So even after a startup gets funded, founders may still need to make tough choices about where to invest scarce capital. To make those choices easier, last week, in what it calls a “first-of-its-kind” move, Dell introduced a $100 million initiative targeted toward newly funded small businesses.

The 10% Solution

A major part of the plan is a credit fund for small businesses. To qualify for the Dell Innovators Credit Fund, a business must have received funding from a pre-selected group of VCs or angel investors (Dell is adding new firms to the initial group) within the last 90 days. Qualified businesses can then access up to 10% of their funded amount (up to $150,000) in credit offered through Dell Financial Services, with what Dell calls “accelerated, limited credit terms.“ The fund is intended to help young businesses spend their investment capital on revenue-generating activities, not on technology purchases.