Episode 4 - Interview with Ethan Singer
In this episode, I will talk with Ethan Singer from Mighty Partners.
Guests
Show notes
In this episode, I will talk with Ethan Singer from Mighty Partners. Mighty Partners, formerly Fundabl, was founded in Sydney in 2021 by a passionate team on a mission to support Australian startups to thrive and scale. They do this by providing tailored venture debt funding solutions, to meet the unique needs of every business and to help foster a more diverse funding environment.
We will talk about the venture debt market, how to back great founders, but also about the Australian ecosystem.
As always, enjoy and share it.
In this episode
Ethan Singer explains how Fundable, a short-term bridging lender for Australian startups, became Mighty Partners, a venture debt fund offering flexible growth loans. He sets out its lending criteria and speed, compares Australia's small venture debt market with the US, and explains when debt beats equity: when a company has predictable revenue and knows the return on each dollar. He expects alternative capital, and founders who keep most of their company, to be celebrated in future.
Chapters
- 0:00From Fundable to Mighty Partners
- 2:11Venture debt in Australia today
- 4:36What Mighty Partners lends and to whom
- 7:33Ticket size and speed
- 7:56The Australian startup ecosystem
- 11:40Venture debt vs venture capital
- 18:46What venture debt adds beyond capital
- 21:04Raising a new fund in a hard market
- 25:12Interest rates and venture debt
- 28:00The future of venture debt in Australia
Key facts
Mighty Partners launched about three years ago as Fundable, a short-term bridging lender, and rebranded after raising a new venture debt fund for Australian growth businesses.
Mighty Partners provides only debt: loans of up to three years, into the millions, with options such as interest-only periods and flexible drawdowns.
Borrowers must have an Australian entity with revenue, at least 50,000 a month in recurring revenue (more for longer loans) and a minimum cash runway; underwriting looks at about 30 metrics.
Mighty Partners' lending process takes about two weeks on average.
Mighty Partners' average loan is about 550,000.
Venture debt is about 2–4% of annual venture capital volume in Australia, against about 16% in the US over the last five years.
Australia's financial services sector lags the US by eight to ten years.
Founders often use Mighty Partners' debt to top up an equity round, for example raising four million in equity and one million in debt to reduce dilution.
Negotiating Mighty Partners' new warehouse facility took three to four months, much longer than its equity raise.
Debt suits companies with predictable revenue that know what each dollar spent will return; it does not suit experimentation.
Everyone in Australian venture debt watches the US Federal Reserve rather than only the Australian central bank.
Ethan recently met an Australian founder who sold a fully bootstrapped business for more than 50 million.
In ten years venture debt and other alternative capital, and founders who keep most of their company, will be celebrated rather than overlooked.
Questions and answers
Why is venture debt small in Australia?
Mostly awareness and education, plus a perception that debt is risky and "unsexy" compared with equity.
Should a startup raise debt or equity?
It depends on the stage, the use of funds and the goals: debt needs recurring revenue to service it, while equity may bring strategic value.
What does a venture debt fund add beyond capital?
Mighty Partners positions itself as a complement to equity that reduces dilution, not as a hands-on value-add investor.
How do interest rates affect venture debt?
They drive both the lender's cost of funds and borrowers' alternatives, so the fund tracks rate expectations and hedges where it can.