Venture Debt

Understanding Venture Debt

Venture debt is a type of debt financing for startups that is typically used alongside equity financing. It provides additional capital to extend the runway, support growth, or finance capital expenditures without diluting ownership. Venture debt is often secured by the startup’s assets, and repayment terms vary based on the lender’s requirements.

Benefits of Venture Debt

• Non-Dilutive Financing: Allows startups to raise capital without giving up equity.
• Extending Runway: Provides additional funding to support growth before the next equity round.
• Flexible Use: Can be used for various purposes, such as product development or scaling efforts.

Related Terms and Concepts

Debt financing, equity financing, runway, capital expenditure