What is Venture Debt?

Venture debt is a form of debt financing used by startups and early-stage companies to cover short-term operating expenses, support market expansions, and bridge the gap between venture funding rounds. It is provided to companies that have high growth potential and are deemed to have a high reward. The principal borrowed must be repaid, along with the accrued interest over a specified period, and this form of financing is typically provided by venture capital firms, banks, or other specialized lending institutions.