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 companies, they wanted to raise some debt, but they didn’t want to be bound by a MAC clause, which is in every bank financing.

We do not have a MAC clause so if there’s a change we don’t have the ability to retroactively go back and ask people to pay down the debt that’s outstanding. Whereas a bank does, and that’s a big deal for a lot of companies.

Meet Nicholas Bologna, Eastward Capital Partners Investment Partner.

Back to the Venture Debt Blog

This is not an offer to sell, or a solicitation of an offer to purchase an interest(s) in any fund managed by Eastward Capital Partners, LLC (“Eastward”). Such an offer will be made only by an Offering Memorandum, a copy of which is available to qualifying potential investors upon request. This material is not financial advice or an offer to sell any product. Eastward is a registered investment adviser. Registration does not imply a certain level of skill or training. More information about Eastward including its advisory services and fee schedule can be found in Form ADV Part 2 which is available upon request.