Collection: Venture Dept & Loans

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Should you get venture dept or not? What is the difference between a venture dept and a bank loan? This article highlights some pros/cons and surfaces other considerations on a popular alternative to equity fincancing.
Published/Updated on Sep 12, 2022

Exploring non-dilutive ways to fund your business going forward?
Here's a collection of insights and perspectives on venture dept and loans.

SVB, Silicon Valley Bank on Understanding Venture Dept Financing
Original post by Armando Argueta, Vice President in the Early Stage Practice: https://www.svb.com/startup-insights/venture-debt/how-does-venture-debt-work

Venture debt is a type of loan offered by banks and nonbank lenders that is designed specifically for early-stage, high-growth companies with venture capital backing. The vast majority of venture-backed companies raise venture debt at some point in their lives from specialized banks..

Key takeaways:

  • Venture debt can be used as performance insurance, funding for acquisitions or capital expenses or a bridge to the next round of equity.

  • A loan is the beginning of a relationship; a partnership-focused lender will value flexibility and playing a long-term game with your company and investors.

  • Venture dept follows equity; it doesnโ€™t replace it (source of validation and underwriting)

  • Venture dept and Loans are less flexible than equity and often require concrete repayment terms

  • Venture debt isnโ€™t usually available to seed-stage companies

  • More traditional