Venture capital trends revealed a sobering reality for many founders: down rounds are on the rise. With interest rates still elevated and many startups struggling to hit projected growth metrics from their last raise, more founders are accepting lower valuations just to keep the lights on. Nationally, nearly 20% of Q1 deals were classified as down rounds, the highest percentage since 2020.

But the valuation cut is only half the story.

To mitigate their own risk, investors are pushing increasingly aggressive terms—especially in later-stage deals. From non-standard preference shares to "double-dip" liquidation clauses (where investors get their money back andmaintain equity upside), many founders find themselves with dramatically reduced ownership or with payouts tied to unreasonably high exit thresholds.

Why Debt Equity Might Be the Saner Option

In this environment, debt equity (or revenue-based financing, simple loans, and convertible notes with clear terms) is gaining traction. And for good reason:

• It’s transparent: There are no hidden ratchets, funky preferences, or end-of-the-road surprises.

• It’s non-dilutive or dilutive only on your terms: Debt structures like SAFEs or capped convertible notes let you control when and how equity is triggered.

• It’s motivating: You keep ownership, which means more motivation to grow without handing over the reins.

When structured with a clear repayment plan—or a conversion option that aligns with your company’s growth—debt equity is often the cleanest, least surprising way to fund real momentum.

The Bottom Line

If you're raising right now, don’t just chase the biggest check. Chase the best structure—the one that keeps your cap table clean, your goals aligned, and your future intact.

In Nebraska, we build companies that last. Let’s make sure the deal structures we sign support that longevity.