Could Venture Debt Be Right For You?

The collapse of Silicon Valley Bank in March 2023 profoundly changed the market for venture debt - and start-up funding more broadly. Whilst many had dire predictions about how the bank's demise might affect funding options, the impact has in fact been that a wider group of funds and institutions have stepped up to offer venture debt. This proliferation means that founders need to understand their options in order to choose the most appropriate deal for them.

Here we look at what venture debt actually is and why it can be a valuable tool in the financing toolbox.

Why seek venture debt funding?

The continuing turbulence in venture capital funding provides an important and timely reminder to founders and investors in earlier stage, high growth, venture backed businesses (particularly tech start-ups), to consider venture debt as an option in their journey to IPO/sale and as a valuable supplemental or alternative way of accessing funding between equity raises.