Subordinated debt is not the sexiest way to finance a business’s growth. And while it may lack the allure of venture capital, crowdfunding or angel investing, it can transform a company’s prospects—especially when that company lacks tangible assets.
That’s certainly been the experience of Paul VallÃ©e, who has used sub debt twice to help his company, Pythian, progress. (The firm ranked No. 151 on the 2016 PROFIT 500 Ranking of Canada’s Fastest-Growing Companies, with five-year revenue growth of 437%.) At the 2016 PROFIT 500 CEO Summit in Toronto in October, VallÃ©e and Susan Rohac, vice-president, growth & transition capital at BDC, discussed ways to get the absolute most out of this financing tool.