The global economy may be on the brink of another downturn and Facebook’s IPO has some suggesting that it’s ‘RIP Good Times’ all over again, but Dell is betting that high-growth startups are going to need hardware regardless.
Yesterday, it announced a new financing program designed to encourage startups to select Dell products.
The Dell Innovators Credit Fund allows angel and venture-backed companies to access a credit line with Dell of up to 10% of the amount of funding they’ve raised in the past 90 days, or $150,000. Additional credit may be available to well-qualified applicants.
According to Dell president Steve Felice, “In talking with business owners and listening to their needs, they tell us what they need most is access to capital and technology that enables them to grow. Dell’s new Credit Fund provides credit and access to technology to help fuel global growth and innovation while helping startups preserve precious equity capital for other business needs.”
Dell has earmarked $100m for the Dell Innovators Credit Fund, which is the company’s latest attempt to cozy up to entrepreneurs and emerging companies. Fringe benefits offered to program participants include hardware and software integration help, access to Dell consultants and escalated technical support.
On the surface, the Innovators Credit Fund seems sensible. It’s often difficult for startups to obtain credit, and despite the fact that angels and venture capital firms have been falling over themselves to throw money at promising startups in the past several years, there are plenty of reasons a funded startup might want to make a large purchase on a line of credit. In launching a credit program of its own, Dell can potentially assist startups and sell more product at the same time.
This said, thanks to services like Amazon AWS, this latest startup boom is very different than the one we saw in the late 1990s. Yes, there’s a lot of money out being thrown around, but not nearly as much of it is being spent on expensive hardware. Increasingly, more and more companies are taking advantage of the cloud to reduce their capital expenditures, so it will be interesting to see how many startups, and which kinds of startups, see a need to take advantage of Dell’s new credit fund.