Navigating Debt as a Growth Driver with Kevin Houston
Subtitle: A founder’s guide to revenue-based financing as a capital strategy for scaling SaaS businesses
In this episode, Isaac Souweine speaks with Kevin Houston, founder of Duration Growth Advisors, about debt financing as an alternative funding strategy for software companies, especially bootstrappers and other denizens of the “messy middle”. The conversation is grounded in the concept of matching duration of financing capital to the expected company outcome. Within that framework, Kevin and Isaac explore when debt can be a good fit, how to evaluate options across stages of company development, and how to manage risk. They also take a crack at the en vogue concept of “seed-strapping.”
Key Takeaways:
01:39 – Kevin introduces his firm and shares his career path through CIBC, Espresso Capital, and FounderPath.
08:15 – “The nerdiest thing” discussed in the episode – Kevin explains the financial concept of duration, how it applies to capital sources, and its relevance to founders.
12:40 – Kevin maps out the debt market for SaaS founders, breaking down different types of debt products — from fintech to regional banks — and who they are suited for based on ARR.
18:50 – Why venture debt may not suit every founder, and what other options exist for those who don’t want the VC playbook.
24:45 – The importance of flexibility, key financial covenants to watch for, and how to avoid misalignment with lenders.
30:55 – Kevin compares the debt funding process to venture capital, describing how lenders evaluate businesses and how he helps founders navigate it.
37:50 – The origin of Isaac and Kevin’s connection – this high-performing LinkedIn post that illustrates a bootstrapped founder’s journey from $0 to $10M ARR with minimal dilution.
44:25 – Kevin discusses ideal conditions for equity funding and highlights the example of Linear as a strategic equity user.
52:14 – A conversation on the seed-strapping strategy — combining early equity with later non-dilutive funding — and the alignment issues it raises.
Episode host and guests:
Isaac Souweine, Partner, Pender Ventures
Kevin Houston, Principal and Advisor, Duration Growth Advisors
Additional Resources Mentioned:
Back to top ↖