What is Venture Debt?

Venture debt is a non-dilutive financing option for venture-backed companies, designed to complement equity capital. It typically offers a lower cost of capital than equity and can help extend runway, support growth initiatives, or bridge to the next funding round.

Key points:

• Provided by specialized banks or venture debt funds
• Commonly structured as term loans, revenue-based financing, or equipment loans
• Often includes warrants, allowing lenders to purchase equity in the future
• Frequently used for expansion, strategic acquisitions, or to delay equity dilution