Venture debt is a smart and critical source of capital for today’s entrepreneurial companies. As a complement to equity financing, venture debt provides growth capital to extend the cash runway of a startup company in order to achieve the next milestone while minimizing equity dilution for founders and investors.
The venture loan is our most common investment structure. It provides a company with growth capital while incurring limited dilution. It can be used to fund operations until the next round of financing. Quite often it is used to finance a company’s activities as it moves from being cash flow negative to cash flow positive. The use of proceeds is extremely broad and can include funding for research and development, sales and marketing, acquisitions, etc. Existing banking facilities can be accommodated, and venture debt’s flexible structure allows for various draw down and repayment scenarios.
- Growth capital
- Limited dilution
- Broad use of funds
- Flexible repayment structure