Claret Capital Partners’ Post

Venture Debt: Advanced Deal Sourcing Strategies to Maximize Returns by Zack Ellison, MBA, MS, CFA, CAIA This article (#14 in the series) was originally published in Venture Capital Journal as part of a monthly column on venture debt. In each piece, Zack shares his insights on the latest trends and strategies in this growing segment of the private credit market. Venture debt offers a powerful way to invest in innovation, providing lower risk and attractive returns while complementing traditional venture equity. Read it here: https://loom.ly/3zy5cgM #VentureDebtConference #VentureDebt #DealFlowEvents

I've been studying equity in investing, and the more I learn, the more I see how powerful it is for building wealth in the long run. Equity is basically owning a piece of a business - rather than lending money (like in fixed income), you become a shareholder and bet on the company’s growth. The upside? If things go well, the returns can be huge. The challenge? The risk is higher too. I’d love to learn from those with experience in this area - what’s your take on it? 😉 Raul and Marlon, please share your thoughts. #equity #investing #fintech #startup #business #holder #shareholder #stakeholder #income #growth

Dive into the latest strategy in private debt market management with a focus on lower-middle-market companies. Spring H. of Star Strong Capital, profiled by Michael Bodley on PitchBook, announces a promising $250M direct lending vehicle aiming to empower startups and mature companies with tailored loan solutions. Read how Star Strong's distinctive approach with shorter lockups and investor-friendly conditions positions it uniquely in saturated markets. https://lnkd.in/eyiq8hh3 #PrivateDebt #PrivateCredit

Interested in #venturedebt 👀 ? Check out this paper📑 by Carolina Miller 👇 explaining how venture debt aligns perfectly the interests of the startup, the lender and the investors. TL;DR here are some key facts💡 about venture debt : ⏩️ convenient alternative to capital investment as it allows to slow down #dilution as the company grows ⏩️ usually differs from traditional #lending as it features a #warrant instead of #guarantees ⏩️ lenders prefer #vcbacked companies, especially if a #followon investment by said VC funds is expected ⏩️ venture debt is a #growth strategy instrument, entering in full deployment in stages where capital has become 1. too #expensive for new investors and 2. too dilutive for incumbent investors ⏩️ funds sourcing of lenders is the main driver of differences in pricing and risk appetite between #bank lenders and #nonbank lenders Any further insights 💭 on venture debt, please share in comments !🚀

🌟 Introducing R&D Loans to our online platform Thanks to our dedicated investors, we’ve just raised an additional $23 million to bring R&D Lending to our online platform. This new product is designed to meet the funding needs of Aussie companies investing in innovation and utilising the R&D Tax Incentive rebate. With it, we’re funding companies in ways they really need, providing: ✅ Maximum runway extension, ✅ Optimised capital efficiency, and ✅ No dilution, whatsoever And, as always, we’ve made it the fastest and simplest capital they’ll ever raise, turning funds around in 48hrs. 🤝 We’re also grateful to our existing customers who allowed us to fund over 30 loans in private and provided feedback before making the offering more widely available, and we’re now eager to support others who are making a difference on a global scale. 🦾 From lab-coats to LLMs, are you on an R&D journey? Read more about our journey and the future of funding R&D in the AFR: https://lnkd.in/gP_TSsbT #Kashcade #Innovation #ProductLaunch #RnD #Technology #BreakingNewGround #IndustryLeaders #AustralianStartups #ResearchAndDevelopment #AFR Alex Simmons, Patrick Nappa, James McGrath, Joshua Sanders, Andrew Whitten, Alistair McKeough, Alex Bain, Jonathan Lay, Sam Jacobson

With the release of the 2024 Inc. Magazine. Founder-Friendly Investors list just around the corner, Impact Partners is pleased to share an article by Graham Winfrey, features editor at Inc., featuring insights from client David Spreng, founder, CIO, and CEO of Runway Growth Capital. "You’d be crazy to raise significant capital without considering debt,” says David Spreng, founder and CEO of venture debt firm Runway Growth Capital. As is the case with VC and PE, when it comes to non-equity financing, the most important thing to consider is which lender will be the best partner, “not who’s offering you the lowest interest rate and best terms,” Spreng adds. “Those are important, but not nearly as important as who’s going to be a good partner when there’s a bump in the road. And there will be—there always is.” https://lnkd.in/e5vNDJiC

OakNorth Provides £50M Of New Funding To Leading Entrepreneurial Private Equity Real Estate Investor, Paloma Capital Read more: https://lnkd.in/dhxGScF4 #OakNorth #PalomaCapital #PrivateEquityFunding #RealEstateInvestment #FintechPartnership #EntrepreneurialInvestment #FundingSuccess #RealEstateGrowth #finance #fintech #FinancialIT

Moneybox Announces New £70M Investment, Secondary Share Sale & Valuation Of £550M Read more: https://lnkd.in/ezkFyia9 #funding #fundraising #Moneybox #Investment #SecondaryShareSale #Valuation #FintechFunding #UKFinance #finance #fintech #FinancialIT Ben Stanway, Charlie Mortimer

Several companies in the portfolio have almost died because of the venture debt hurdle. The most underrated advice for seed founders is not to take on the venture debt early on, especially if they don’t generate substantial revenues. And even if they do, I would recommend not to take it in any form unless it’s paired with growth equity. These lenders are not your allies and are certainly not like GPs in the venture firm as founders might assume. When the time comes (missing a payment) they will do whatever it takes to destroy you and call it back. It’s not an exaggeration; it’s a fact.

When exits become scarce, there are other ways to tap into liquidity. Dividend recaps are one such way, and are hitting new highs per PitchBook. From the article: "Year-to-date dividend recap volume in the US for PE-backed companies, as of Sept. 24, stood at $69.3 billion, and this year’s annual total is expected to surpass 2021’s record high of $76 billion, according to PitchBook-LCD data." One interesting point to note from the article is that tapping into this type of liquidity is most often used when interest rates are low, and the cost of adding debt to the balance sheet is negligible. But that is not necessarily the case today. Interest rates remain at heightened levels. In today's environment, the tactic is being used to offer much-needed liquidity to LPs, whose patience is likely growing thin over the lack of exits over the last few years. Of course, the trick is always striking the correct balance between being creative on accessing liquidity and keeping a healthy balance sheet. That part is more art than science. Endeavor Colorado Zeb King Tegan Stanbach Kathryn Dickson Julia Johansson #privateequity #venturecapital #entrepreneurship #founders #investing #startups #innovation https://lnkd.in/gxpJ6Nei