'Debt isn’t the problem for startups...': Entrepenuer on rewiring startup thinking
Most startup founders fear debt, but Amitt M says that mindset may be costing them growth. He warns that financial illiteracy — not debt itself — is the bigger risk for startups.
- Jun 21, 2025,
- Updated Jun 21, 2025 2:29 PM IST
In a candid reflection on his early entrepreneurial journey, Amitt M, Founder of Signal Root, has challenged a long-standing fear in the startup ecosystem — debt. Sharing his personal experience, Amitt revealed how his early approach to business was shaped by a deep aversion to borrowing, associating debt with desperation and failure.
“When I first started out, I treated debt like a curse word,” he said. Like many founders, he believed the only goal was to remain “debt-free” as quickly as possible, and assumed that borrowing money was a last resort for failing businesses.
That belief, however, was upended during a conversation with the founder of a chemical manufacturing startup clocking Rs 180 crore in annual revenue. Curious about how the business scaled production without burning cash, Amitt asked about the underlying strategy. The answer: smart leverage.
“Debt isn’t a problem when it buys you assets that pay for themselves,” the founder told him.
Startup debt is the practice of funding a startup's activities or growth using borrowed money, usually in the form of loans that require repayment with interest. This approach enables startups to retain complete ownership of their business while also offering structured repayment plans for better financial management.
The insight was backed by a real example. The manufacturer had financed his plant’s machinery through loans. While the monthly EMI came to ₹8 lakh, the investment boosted monthly profits by ₹18 lakh. With orders pre-booked months in advance, repayment risk was almost negligible.
That conversation became a turning point for Amitt, forcing him to reconsider his beliefs about debt.
“It wasn’t the debt itself that was risky. It was why you took on debt,” he said. “If you’re borrowing to plug holes, it’s dangerous. If you’re borrowing to multiply profits, it’s strategic.”
Now a vocal advocate for responsible borrowing, Amitt laid out four principles he follows:
Use debt to buy productive capacity, not for vanity expenses
Ensure the asset or investment offers predictable, surplus returns
Run worst-case scenarios to assess repayment feasibility
Negotiate repayment terms aligned with cash flows
“Today, I still avoid unnecessary debt. But I no longer fear it,” Amitt noted. “Most founders don’t have a debt problem. They have a financial literacy problem.”
His takeaway is simple but powerful: Treat debt like a lever. If the math works and the risk is manageable, it can be a valuable growth engine, not a liability.
Amitt’s reflection comes at a time when many early-stage startups hesitate to take on loans, fearing it might compromise their runway or valuation. But he believes this fear may be unfounded — or worse, holding founders back from sustainable growth. “If founders can reframe their mindset and see debt as a tool instead of a trap, they’ll unlock scale that equity alone can’t always provide,” he said.
In a candid reflection on his early entrepreneurial journey, Amitt M, Founder of Signal Root, has challenged a long-standing fear in the startup ecosystem — debt. Sharing his personal experience, Amitt revealed how his early approach to business was shaped by a deep aversion to borrowing, associating debt with desperation and failure.
“When I first started out, I treated debt like a curse word,” he said. Like many founders, he believed the only goal was to remain “debt-free” as quickly as possible, and assumed that borrowing money was a last resort for failing businesses.
That belief, however, was upended during a conversation with the founder of a chemical manufacturing startup clocking Rs 180 crore in annual revenue. Curious about how the business scaled production without burning cash, Amitt asked about the underlying strategy. The answer: smart leverage.
“Debt isn’t a problem when it buys you assets that pay for themselves,” the founder told him.
Startup debt is the practice of funding a startup's activities or growth using borrowed money, usually in the form of loans that require repayment with interest. This approach enables startups to retain complete ownership of their business while also offering structured repayment plans for better financial management.
The insight was backed by a real example. The manufacturer had financed his plant’s machinery through loans. While the monthly EMI came to ₹8 lakh, the investment boosted monthly profits by ₹18 lakh. With orders pre-booked months in advance, repayment risk was almost negligible.
That conversation became a turning point for Amitt, forcing him to reconsider his beliefs about debt.
“It wasn’t the debt itself that was risky. It was why you took on debt,” he said. “If you’re borrowing to plug holes, it’s dangerous. If you’re borrowing to multiply profits, it’s strategic.”
Now a vocal advocate for responsible borrowing, Amitt laid out four principles he follows:
Use debt to buy productive capacity, not for vanity expenses
Ensure the asset or investment offers predictable, surplus returns
Run worst-case scenarios to assess repayment feasibility
Negotiate repayment terms aligned with cash flows
“Today, I still avoid unnecessary debt. But I no longer fear it,” Amitt noted. “Most founders don’t have a debt problem. They have a financial literacy problem.”
His takeaway is simple but powerful: Treat debt like a lever. If the math works and the risk is manageable, it can be a valuable growth engine, not a liability.
Amitt’s reflection comes at a time when many early-stage startups hesitate to take on loans, fearing it might compromise their runway or valuation. But he believes this fear may be unfounded — or worse, holding founders back from sustainable growth. “If founders can reframe their mindset and see debt as a tool instead of a trap, they’ll unlock scale that equity alone can’t always provide,” he said.