Capital is more expensive, investors are more selective, and companies are rethinking how they fund the next phase of growth. At Toronto Tech Week 2026, Flow Capital and CIBC hosted a discussion with operators and lenders on how scale-up companies are navigating today's funding environment, where growth lending fits into the capital stack, and how AI is changing the way businesses raise and deploy capital.
The speakers:
The panel opened on the state of the fundraising market, and the answer from both operators was the same word: selective. Companies that historically raised on momentum are now being asked to defend unit economics and capital efficiency before they get the meeting, let alone the term sheet.
“Right now, there is more focus on revenue quality, not just revenue,” said Kirk. “Investors are also focused on operating leverage, business priorities, and how sharp the plan is. You have to have an edge to land what used to be more accessible, but capital is still available.”
Connor, who raised Wisedocs' Series A during the SaaS winter, agreed and added a wrinkle that's making the market harder to navigate. The traditional fund categories are blurring. Funds that historically focused on early-stage venture now appear at multiple stages of the cap table, which raises the bar on good business fundamentals, strong ratios, and execution, rather than narrative.
His conclusion set up the rest of the afternoon: “A debt stack gives you leverage and capacity to continue competing. Without it, you are at the mercy of the market.”
The menu of funding options has widened, but few founders take full advantage of it. Operators warned founders to stop thinking about funding as a sequence of one-off raises and start thinking about it as a stack of complementary levers you assemble in advance.
Connor laid it out: “You can have debt, your primary equity, growth equity — is there a minority buyout, a majority buyout? Private equity? There's so much opportunity once your business reaches a certain threshold. That's why you need that arsenal of skill sets to go in with the right ability and tooling when you need to make decisions.”
Kirk made a parallel point on the operational side: before reaching for outside capital, founders should look at what their existing business model can fund organically. “Don't be afraid to get creative or thoughtful on how you manage your own operations in a way that gives you flexibility on capital requirements or cash needs.”
Josh, watching from the lender side, offered the line that got a laugh from the room: “The best form of non-dilutive capital is revenue. If you can find ways to grow your business, that's probably better off than spending time talking to me and Niramay.”
A recurring theme was how founders misjudge cost of capital, almost always by anchoring too hard on a single number.
Josh offered the simplest counter-frame: “Most of our borrowers trade at a revenue multiple. So the cost of equity capital is tied to the growth rate: whatever they're growing at, they're increasing their equity value. If you're growing 50%, every dollar you raise in equity is very expensive compared to our interest rate.”
In other words, equity isn't free. It's just deferred and denominated in future enterprise value. If your business is growing meaningfully faster than the rate on a debt facility, the debt is the accretive choice, even at mid-teens pricing.
But Kirk warned against making the decision a pure spreadsheet exercise: “ It all comes down to what your capital stack looks like as a whole and what you're working towards. Don't default to something purely mathematical. Your business is going to go through ups and downs, and you need to take into account the non-tangible elements.”
Connor pushed the point further. The question, he argued, isn't just “what does this cost?” but “what does this do?”. He argued that, before raising capital, founders should have a clear plan on what that capital will be used to their advantage.
Niramay added an insurance analogy that captures why the facility itself, separate from any drawdown, is part of the value: “When you take on debt, there are two pieces: there's the option to draw, and then actually drawing. For the time you wait and just hold the option, the price is essentially nothing. So, you might as well have that option. When the time comes to evaluate whether to draw, that's when the calculation comes in. Should I do it? Am I getting an ROI? If yes, it's that simple.”
The panel covered when founders should start thinking about debt, how non-bank lenders differ from banks, how debt changes the way you operate, how to use it well, and the misconceptions that keep founders from getting the most out of it.
The consensus across the room was clear: founders should be thinking about debt earlier than they do, and treating it as a planned-for layer alongside equity rather than a fallback when runway is low.
“You need to plan before your capital financing,” Connor said. “Anytime you do a priced round, I would build debt into the plan, because it gives you leverage and another lever. I would not wait until the very end when runway is low, because you probably will not get debt financing at that point.”
The math of why is uncomfortable. As Connor put it more bluntly later: “Banks and lenders usually give you money when you have money, not when you desperately need it.”
Kirk wished he'd gotten there sooner at Common Wealth. “In hindsight, it would have made more sense to look at it earlier, both for the lead time benefit and for the opportunistic piece. Looking back at the past five years, there are a few projects where it might have made sense to have a facility in place. Whether or not we went ahead with it is another question but having that lever ready gives you the opportunity to make better and more efficient decisions.”
Connor added a piece of advice for earlier-stage founders specifically: “When you're in early stages, you're too trigger-shy. You need to be more trigger-happy, push the button, and ask the questions. All you're going to get is a 'no,' and then you'll know what you need to measure to get the 'yes.'“
Ask most founders why they're considering debt and they'll talk about avoiding dilution. That's true, but it undersells what debt buys you. The panel kept returning to a different word: optionality.
Kirk's experience at Common Wealth was the clearest example. The company set up a debt facility with Flow Capital in the summer, then closed its Series A about two months before the panel. The debt didn't replace the equity round, it set the equity round up to go well. “The facility was a strong precursor to the Series A process,” he said. “It helped ensure the business was well positioned and ready to run a smooth process. There is a cost, but there is also a benefit: it tightens things up in a way you might not otherwise be forced to do.”
When you walk into Series A diligence with a debt facility already in place, you're signaling that someone has already underwritten your business, that your metrics survive scrutiny, and, critically, that you don't have to take a bad deal. You can walk away.
Connor described the same dynamic more vividly: “It's having a back pocket ace.” When Wisedocs launched its rebuilt platform six weeks before the panel, 15 major carriers came inbound, the kind of breakout moment most companies see once in their history. “This is where debt comes in,” he said. “Where I can invest in a team or a special project, or double down on a partnership. If you use it conservatively, not as a last resort, it can have a huge ROI.”
Josh framed the same idea from the lender's perspective. “When we think about lending, optionality is key. In theory, could we be their last partner to cash flow positive? If they cut back on certain growth expenditures, could they be cash flow positive at a certain point? That's the optionality. At the end of the day, debt is leverage, and it's a powerful tool. You have to use it correctly.”
Connor has a list he comes back to often when founders ask him about debt. “Three things founders get panicked about,” he said: “warrants, covenants, and servicing debt without ROI.”
His advice on all three is the same: read the term sheet carefully, model your downside, and walk away if the structure doesn't work. “You have to make sure the term sheet works for both parties. If it's not the right deal, don't take the deal.”
Kirk added a few more concerns that come up before founders sign:
From the lender side, Josh sees the same misconceptions around growth lending. The first is the one already covered: anchoring on interest rate alone.
The second is use of funds: “I've had many situations where I refer companies to equity instead, because what they tell me they want to do with the money is an equity use case, not a debt use case.”
Lastly, readiness: “A lot of companies think they're ready for debt when they're not. They don't understand their metrics well enough to have high conviction, or they don't have the ability to provide the financial data we need.”
From the lender side, he laid out what readiness looks like: “First, demonstrated signs of product-market fit, which for us often means retention. Are customers continuing to buy and expand? Second, a clear go-to-market strategy. Can you clearly identify your ICP, how you find them, and how you win them? And third, financial discipline. Do they understand their numbers and their unit economics, such that it makes sense to use debt for growth capital?”
Beyond the structure of any individual deal, the panel kept returning to a quieter but important point: the right partner can matter more than the terms. As Kirk put it, “Being thoughtful about who you’re working with goes a long way.”
That theme carried into the discussion around bank and non-bank lending, where Josh and Niramay surprised the room with the same point: Flow Capital and CIBC don’t really compete with each other.
“To be clear, we do not compete,” Josh said. “If borrowers can access a bank's cost of capital to meet their debt needs, they're going to take it because the cost discrepancy is significant. But there's a space for non-bank lenders in the market, even at a mid-teens cost of capital. Some of that comes down to the blended cost of capital with venture banking requirements: you might need to raise a certain amount of equity to unlock a certain amount of bank debt. We don't always have that requirement. There are also differences in risk profiles and advance rates. We might lend $5M where the bank would lend $500K, or the reverse. It depends.”
His one-line summary: “I'd say we compete more with equity than with each other.”
“I still have to find a deal where I'm competing with Flow. We don't,” Niramay confirmed from the bank side. “Depending on where you are, you can choose either non-bank or bank.”
For founders, the practical implication is that the two aren't an either/or choice, they can be sequential or complementary, and the right lender depends on stage, structure, and what you need the debt to do. Working with one doesn't preclude working with the other. As Josh put it later: “Maybe you graduate to CIBC as part of your next round.”
Once the capital is in, the harder question is what to do with it. When an audience member asked which is more difficult today — raising capital or deploying it efficiently — both operators said the same thing.
“Deploying capital is hardest,” Connor said, “because it comes down to people and culture. You can raise money in a number of ways — your terms might not be the best, the markets might not love what you're doing at the time — but you can raise money. As a CEO, you're accountable for how thoroughly you follow through on everything you say you're going to do. You can have all the money, but if you can't deploy it, you're still at a crossroad. And it does lead to failure to execute.”
The panel was also specific about how AI is changing three things: how companies deploy capital internally, how long sales cycles are taking, and what lenders look for in diligence.
Connor was clear that AI has reshaped how Wisedocs operates: “We've had massive adoption across the board, started the year around 53% AI tools, now we're about 73%. Are we going to go to 100% and cut half our workforce? No. We still need people, and I believe that human-in-the-loop is key to using AI tools.”
He was equally clear that the productivity boost doesn't automatically translate into cheaper businesses. Kirk made the same point about Common Wealth: “We've seen a huge spike in productivity across many functions of the business. Does that mean we're spending less? I'd argue no, we're just much more impactful and effective at generating output and accelerating along our path. We moved a lot more quickly along the curve than we maybe thought we would, and that changes your plan. That speed and efficiency piece is something debt providers and equity investors alike are going to ask you about.”
Both operators landed on the same takeaway: AI is changing what capital gets spent on, not necessarily how much gets spent.
The boardroom dynamic Josh described is the one quietly extending sales cycles across the SaaS industry right now.
“Pipelines aren't necessarily going away, but they're taking longer,” he said, “because the board says, 'What if Anthropic releases a version of this product next quarter? Let's wait another 90 days.' What we're hoping for is that most people will realize that vibe-coding is a lot more work than it seems, and you still have to maintain the code. You're better off trusting a company that lives, sleeps, and breathes the problem you're trying to solve.”
He also described how procurement is changing at the buyer level: “Boards and finance departments and CEOs are now asking everyone: Is this a piece of software you need? Are you using it effectively? Can you get 80% of the functionality from a subscription you're already paying for? Everything is being put under a microscope.”
For growth-stage SaaS companies, this is the single most important macro shift in the room, and it's affecting both fundraising narratives and revenue forecasts.
From a lender's perspective, AI defensibility has become part of every underwriting decision.
“We have to factor in the AI opportunity and the AI risk for every business we look at now,” Josh said. “We have almost an AI threat checklist: What do they have that's defensible? What can be accelerated by AI? What are the threats?”
The questions he asks are pointed:
“What is proprietary? Do they control the flow of data? Do their customers think about them as a workflow or just a dashboard? What is the actual cost of ripping them out and replacing them? If you're selling to SMBs that were on spreadsheets before and now they're on your software, well, maybe they can vibe-code something similar and pretty cheap. If you're selling to enterprise and talking about ACVs in the hundreds of thousands of dollars, do they have an internal AI team solving these problems already?”
Connor, whose company has built over 1,800 proprietary AI models, was emphatic about what defensibility requires. “Agentic solutions are not the final solution to all problems. What happens when model costs go up? Defensibility means you have to build your own models. If Anthropic shut down tomorrow, I would still be able to continue the business. Would it be a pain? Yes. But I could still continue, and a lot of businesses can't say that. The days are gone where you can just put an LLM in place and call it a product. Now you need full workflows, outputs, outcomes, and configurations fully embedded into environments.”
His advice for founders: “Build really good moats, and make sure your security, compliance, and regulation are there, because that's going to be a huge part of this. The data is the moat, that's going to be the future.”
Kirk closed the AI thread with a reminder especially relevant for any founder in regulated industries: “In the age of AI, the focus on efficiency is not going away. But also don't get caught up in the hype, the compliance piece is critical, especially in financial services.”
If there's one piece of closing advice that captured the spirit of the day, it was the one Josh offered at the end:
“Your capital stack is fluid. Everyone who becomes an investor in you wants you to succeed. They're going to be interested in working with other capital partners who want you to succeed. Don't think that borrowing from Flow means you can never work with CIBC. Understand that it takes a village to build your capital structure. Talk to as many people as possible. Keep your advisors close. Pressure-test ideas.”
Capital strategy, in this telling, isn't a series of one-off decisions you make under pressure when you need money. It's a deliberate, evolving plan (equity, debt, banking relationships, operational efficiency, and the discipline to deploy what you raise) built well in advance and adjusted as the business evolves.
