Venture Debt
Venture debt is a loan for venture-capital-backed startups, typically Series A to C, that are growing fast but still loss-making. It complements equity, extending runway and funding growth without giving up additional ownership.
Because it relies on the backing of institutional investors and growth trajectory rather than profitability, venture debt is one of the few financing options available to companies still refining their model. It is typically flexible (no financial covenants), less expensive than equity, and saves dilution for founders while preserving dry powder for their investors.
Indicative ticket
$2M-$30M
- Quantum
- Typically 20-30% of the last equity round; debt-to-equity kept below ~35% to avoid over-leveraging early
- Repayment
- Draw period, then interest-only period, then monthly principal + interest over 33-36 months
- Covenants
- Typically no financial covenants
- Security
- Senior secured over all assets
- Pricing
- Interest, arrangement fee, warrants, early repayment and/or backend fee
Indicative only and subject to diligence. Actual terms depend on your business and the market.
Business profile
Who venture debt is for
- Startup, typically Series A, B or C
- Fast growth but loss-making
- Venture risk: still refining the business model
- Likely to require additional equity investment
Debt purpose
What the capital is for
- Complement to equity
- Extend cash runway
- Fund capex and R&D
Benefits
Why borrowers choose it
- Flexible, as typically no financial covenants
- Typically less expensive than equity
- Saves dilution for founders and executives
- Preserves dry powder for your investors
When not to use it
An honest word of caution
- !Instead of equity
- !As a short-term bridge to a round without certainty of funding
- !For more mature businesses with stable revenue and assets, where other facilities are more cost-efficient
How it compares
Versus growth debt, venture debt leans on investor backing rather than revenue scale, carries no covenants, and almost always includes warrants. Versus mezzanine, it suits earlier-stage companies still refining the model.
Terms, criteria, and sizing shown are indicative, not exhaustive, and subject to further diligence on the company and its assets.
Venture Debt FAQ
The questions founders and finance teams ask us most.
Still have questions? Talk to usVenture debt is a loan for venture-capital-backed startups used to extend runway and fund growth without raising more equity. It complements equity rather than replacing it, and typically includes a small amount of warrants.
Related products
All guidesCashflow financing
Growth Debt
Larger, cheaper debt for scale-ups with established revenues.
Learn moreCashflow financing
Mezzanine
Flexible junior debt between senior debt and equity, for companies nearing an exit.
Learn moreCashflow financing
Revenue-Based Financing
Capital repaid as a share of revenue: fast, flexible, fully non-dilutive.
Learn moreCurious what venture debt could look like for you?
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