As high-growth businesses scale and aim to meet new milestones, financing and planning that growth becomes increasingly important. Venture debt is one option for companies to get that next milestone. But what’s the best time to use venture debt? It makes sense to consider venture debt when your company is…
Apr
07
Apr
03
When growth is your goal, raising capital is top of mind. For growth stage companies, raising capital allows you to hire staff, invest in technology, and respond to the demands of the market. You might think that banks are one of the first places that entrepreneurs look for capital. Yet…
Mar
25
Growing your company involves finding a business model that is repeatable, scalable, profitable, and one that creates value for both the company and its customers. During the startup phase, your company gains expertise in improving your product or service. As your business grows, you continue to refine your process to…
Mar
16
Your company reaches the point where you are generating revenue, but you discover you still need more capital to keep things running. Raising capital allows businesses to continue to grow, and manage day-to-day operations. Raising capital through debt seems like a contradiction, but venture debt financing makes sense for fast…
Mar
16
Why the Reputation of Your Venture Debt Lender Matters The reputation of your venture debt lender is important, and I would put not just the individual lender that you're talking to but the firm. The little-known fact in venture debt is that a lot of the deals that get…
Mar
15
Venture Debt Proposal The CFO's job in diverting a venture debt proposal is pretty easy, although there are some common pitfalls. So with the typical processes is you take you get competing proposals from a bunch of different lenders and you create an Excel spreadsheet you take all the lenders…
Mar
15
Understanding the MAC Clause Recently I got an email from a venture guy who's been in the business for a long time and he asked me if we have a MAC clause—a material adverse change clause-- that's what MAC stands for. Because he was talking to one of his portfolio…
Mar
15
How Venture Debt Benefits a Capital Structure Venture debt benefits a company's capital structure first and foremost by having saving dilution for the team. And what that means is at the exit for the company the entrepreneurs--the guys who are working the really late hours and doing all the…
Mar
09
Venture-sponsored enterprise companies looking to fund growth use venture debt as a way to get the non-dilutive capital they need to extend their cash runway. The value that venture debt brings is attractive to fast growth companies in industries like SaaS, Medical, or Fintech. Capital raised through debt financing…
Mar
03
Milestone Clause Definition We do have in some of our deals where there are multiple tranches, we do have milestone clauses which are very different from a MAC clause. A milestone says if you don't make a certain percentage of your forecast as revenue we don't have to fund the…
Mar
02
In the past few years, venture debt funding has become a popular way for fast growth companies to raise capital. In fact, venture debt is growing faster than the venture capital market, reaching $28.2 billion in 2019 and $27.5 billion in 2020, according to data from Pitchbook. Used in conjunction…
Feb
23
Venture debt has been gaining popularity as a way to extend cash runway for a business. It supplies much needed funding for fast-growing companies looking to scale and continue to grow. Often these companies are on target to be profitable, but they need the capital to keep things running and…
Feb
22
What Makes a Good Pitch: Tim O’Loughlin A lot of the CFO's will ask me what do you want to see in the pitch, and I'm very candid. We’re a growth stage investor. We want to see companies that are showing good revenue momentum. So there should be a…
Feb
16
Debt financing is used by large companies that need capital expenditures yet have a good track record for projected growth. Companies raise venture debt in order to reserve additional capital for next rounds and to invest across their portfolios. It can prevent dilution from new investors by reducing the size…
Feb
09
A Closer Look at Debt Covenants Oftentimes when companies are looking at financial covenants in a deal they will look at their forecast and they'll compare the covenant level that a bank has proposed or a lender has proposed to what their plan is. And they'll say, well I would…
Feb
08
What Stage to Consider Venture Debt The stage that companies should consider using venture debt is a really interesting one. A lot of companies use it when they're pre-revenue and they're trying to extend the time from series A to Series B because they're expecting a big step up in…