“VC funding is now a rare and expensive commodity, and founders are being encouraged to focus again on business fundamentals and capital efficiency. As a result, Venture Debt is now a topic of discussion in most Board meetings, and almost every Startup that’s raising institutional capital (seed to Series D) is thinking about Venture Debt as a meaningful addition to their capital stack.” These are timely and important conversations to be had by founders, management teams, and early investors. And it’s encouraging to see demand for debt continue to increase. But it’s not hard to see why. What’s happening in the industry now can be attributed to a few factors: ✔ We are experiencing a recalibration from the “easy money” era of high valuations. Many venture equity providers are now essentially hoarding capital and waiting for cap tables to self-correct to reasonable levels. ✔ Equity is expensive, especially for late-stage companies. Venture debt has become a more compelling alternative to equity dilution for companies that want to avoid a down round. ✔ Founders are realizing that venture debt is not rescue financing. Rather, companies with consistent revenue and a clear path to profitability are increasingly seeing debt as a means of propelling further growth. While no one can predict the future, we’re very optimistic about the role that debt can (and will) play for late-stage startups throughout the remainder of the year and beyond.
How Venture Debt is changing the industry
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Co-Founder of Impact Partners 🗣️| PR Pro for Families (👨👩👦👦 Family Offices & 👑 Royalty), Funds (💰VC, PE, Growth, FoF, Credit, etc.), and the Founders They Back 🚀 | Early Stage Tech Investor💡| Speaker 🎤
Impact Partners client David Spreng, founder, CEO, and CIO of Runway Growth Capital, lays out how as #VentureCapital funding becomes a scarcer and more costly resource, founders are increasingly urged to prioritize business fundamentals and capital efficiency. Consequently, #VentureDebt has become a prevalent topic in boardroom discussions. Now, nearly every startup, from seed to Series D stages, considering institutional capital is also contemplating Venture Debt as a crucial supplement to their financial strategies.
“VC funding is now a rare and expensive commodity, and founders are being encouraged to focus again on business fundamentals and capital efficiency. As a result, Venture Debt is now a topic of discussion in most Board meetings, and almost every Startup that’s raising institutional capital (seed to Series D) is thinking about Venture Debt as a meaningful addition to their capital stack.” These are timely and important conversations to be had by founders, management teams, and early investors. And it’s encouraging to see demand for debt continue to increase. But it’s not hard to see why. What’s happening in the industry now can be attributed to a few factors: ✔ We are experiencing a recalibration from the “easy money” era of high valuations. Many venture equity providers are now essentially hoarding capital and waiting for cap tables to self-correct to reasonable levels. ✔ Equity is expensive, especially for late-stage companies. Venture debt has become a more compelling alternative to equity dilution for companies that want to avoid a down round. ✔ Founders are realizing that venture debt is not rescue financing. Rather, companies with consistent revenue and a clear path to profitability are increasingly seeing debt as a means of propelling further growth. While no one can predict the future, we’re very optimistic about the role that debt can (and will) play for late-stage startups throughout the remainder of the year and beyond.
Temperature Check: How are startups thinking about debt In 2024? - Hypepotamus
https://hypepotamus.com
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Impact Partners client David Spreng, founder, CEO, and CIO of Runway Growth Capital, lays out how as #VentureCapital funding becomes a scarcer and more costly resource, founders are increasingly urged to prioritize business fundamentals and capital efficiency. Consequently, #VentureDebt has become a prevalent topic in boardroom discussions. Now, nearly every startup, from seed to Series D stages, considering institutional capital is also contemplating Venture Debt as a crucial supplement to their financial strategies.
“VC funding is now a rare and expensive commodity, and founders are being encouraged to focus again on business fundamentals and capital efficiency. As a result, Venture Debt is now a topic of discussion in most Board meetings, and almost every Startup that’s raising institutional capital (seed to Series D) is thinking about Venture Debt as a meaningful addition to their capital stack.” These are timely and important conversations to be had by founders, management teams, and early investors. And it’s encouraging to see demand for debt continue to increase. But it’s not hard to see why. What’s happening in the industry now can be attributed to a few factors: ✔ We are experiencing a recalibration from the “easy money” era of high valuations. Many venture equity providers are now essentially hoarding capital and waiting for cap tables to self-correct to reasonable levels. ✔ Equity is expensive, especially for late-stage companies. Venture debt has become a more compelling alternative to equity dilution for companies that want to avoid a down round. ✔ Founders are realizing that venture debt is not rescue financing. Rather, companies with consistent revenue and a clear path to profitability are increasingly seeing debt as a means of propelling further growth. While no one can predict the future, we’re very optimistic about the role that debt can (and will) play for late-stage startups throughout the remainder of the year and beyond.
Temperature Check: How are startups thinking about debt In 2024? - Hypepotamus
https://hypepotamus.com
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This is definitely the one step missing for the #startup and #venturecommunity in #latam. #Culturally speaking, it makes sense. We hope to see more funds adopt these business models in their own #venturedevelopment programs and work with us at WorkFlow Capital to promote #ESGinvestments from #Mexico to #foreignmarkets.
Managing Director at Silicon Valley Bank | Venture Dallas Co-Founder | Tech Banking
Venture debt can help #startups accelerate growth, achieve key milestones, and cover costs between funding rounds. Check out this article from Silicon Valley Bank for answers to the most common questions our team gets about venture debt. https://lnkd.in/gueXN_Mp
What is Venture Debt | Silicon Valley Bank
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Venture debt can help #startups accelerate growth, achieve key milestones, and cover costs between funding rounds. Check out this article from Silicon Valley Bank for answers to the most common questions our team gets about venture debt. https://lnkd.in/gTaQK37s
What is Venture Debt | Silicon Valley Bank
svb.com
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When paired with equity funding, venture debt can help #startups fuel growth with non-dilutive capital. Read this article from Silicon Valley Bank for a quick overview. https://lnkd.in/gNbXwF_4
What is Venture Debt | Silicon Valley Bank
svb.com
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Managing Director at Silicon Valley Bank | Venture Dallas Co-Founder | Tech Banking
Venture debt can help #startups accelerate growth, achieve key milestones, and cover costs between funding rounds. Check out this article from Silicon Valley Bank for answers to the most common questions our team gets about venture debt. https://lnkd.in/gueXN_Mp
What is Venture Debt | Silicon Valley Bank
svb.com
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Investment Fund Manager | Podcast Host | Doctoral Business Student | Author | 100,000+ Newsletter Readers | LinkedIn Top Voice
💫 Venture Debt: Debunking the Top Five Myths As the startup ecosystem has evolved, venture debt has become an increasingly significant funding option alongside traditional venture equity capital. For those new to venture debt, my earlier columns with Venture Capital Journal serve as an introductory guide, providing insights into the workings and nuances of this fast-emerging alternative credit product. Despite the growing relevance of venture debt, many misconceptions about it persist, largely because it is a newer concept compared to the more familiar venture equity. Drawing from discussions with industry participants and my experience building and launching Applied Real Intelligence LLC ("A.R.I."), a venture debt fund, my April column, released today, aims debunk five of the most common myths surround venture debt. Myth #4: Venture Lenders Compete with VCs Myth: Some mistakenly believe that venture lenders and venture capitalists are in competition and that the introduction of debt can disrupt future equity investments by VCs. Reality: Contrary to this belief, venture debt is not only complementary to venture equity, but often depends on it. Venture debt normally comes into play after a company has secured equity financing, acting as a strategic tool to extend operational runway without further diluting ownership stakes. Venture debt's appeal to VCs lies in its capacity to minimize equity dilution for all shareholders, including the VCs. This preservation of equity stakes is crucial for maintaining incentives for the borrower’s management team and employees while retaining equity to sell in the future. Moreover, venture debt addresses a critical challenge for startups: the risk of running out of operational funds. By providing a vital capital infusion, venture debt significantly lowers this risk, thereby increasing the likelihood of a company’s success. This synergy is recognized by VCs who, understanding the value of venture debt, often introduce their portfolio companies to venture lenders. ➡ See comments for links to the full article #Venturecapital #VC #Venturedebt #VentureCapitalJournal #Entrepreneurship #Startups #Innovation
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The 18 Year Old VC | Founder @ FounderX Venture Partners: Building The World's Largest Open Startup Ecosystem
Venture Debt Master Class (Lessons From Alteria Capital): When Alteria Capital crossed the $750M milestone, the rest of us were busy trying to figure out if raising venture debt is like selling our soul, but with a lower interest rate. 💀 With ₹6,000 Cr deployed across 200 startups, Alteria Capital has become the Rahul Dravid of venture debt - steady, deliberate, and always scoring big. Firstly let's understand Venture Debt Vs Venture Capital: Venture Capital: It's like your ex with whom you had good times but now she wants your equity and your firstborn. Venture Debt? It's the lesser evil, you get cash, but they don’t take over your company (yet). It's basically like getting money from your rich uncle but ensure to pay him back well. So how does Alteria Capital make its investments? 1) They go through data. Alteria Capital does not work with gut feelings! 2) They get creative with their debt structures. Alteria Capital works on tailor made debt structures that fits the growth curve of the startup. So here's the takeaway! Invest in data, focus on long-term strategy, and innovate debt products. I feel that venture debt isn't just an add on, so founders and investors: Take some time to think beyond equity too.
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Venture debt is a form of debt financing specifically designed for early-stage, high-growth startups, that have already raised venture equity capital. As India's startup ecosystem continues to thrive, venture debt has emerged as a popular funding option for some of the profitable and high growth companies because of several reasons like excessive dilution concerns, high valuation expectations, taxation benefits on interest payment etc. In this article, I have tried to add the entire procedural aspects of raising venture debt by a startup / private companies. https://lnkd.in/d3bzfwKR
Venture Debt Funding by way of Issue of Debentures by Private Company
taxguru.in
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In a rapidly evolving financial landscape, venture debt emerges as a compelling alternative funding method for startups navigating uncertain times. As we approach 2024, experts suggest that this trend will gain momentum, providing founders with non-dilutive capital while preserving equity. The article provides valuable insights into how startups can leverage venture debt to fuel growth without compromising ownership stakes. For startup leaders and finance professionals, understanding the nuances of venture debt could be crucial for strategic planning in the coming year. https://lnkd.in/dEtfTJhz
The Rise of Venture Debt: A Sustainable Funding Option for 2024 and Beyond
sifted.eu
