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Venture Debt
Meant for growth. Non-dilutive capital. Advantageous to startups with strong fundamentals. Often used with equity financing to increase total capital available.
What is Venture Debt?
Venture debt, also known as venture lending, is a smart and critical source of financing for today’s entrepreneurial companies. It’s a type of financing that is offered to growth-stage venture capital-backed companies and allows a company to raise additional capital to supplement their equity financing and continue to fuel their growth trajectories.
Venture capital is typically the first source of institutional financing for startup companies. With strong venture capital investors, a technology bank lender will typically provide a term loan and/or receivables financing. Venture debt from Trinity compliments both forms of financing and provides significant value to startup companies, venture capital firms, and technology bank lenders.
Venture debt, also known as venture lending, is a smart and critical source of financing for today’s entrepreneurial companies. It’s a type of financing that is offered to growth-stage venture capital-backed companies and allows a company to raise additional capital to supplement their equity financing and continue to fuel their growth trajectories.
Raise up to $100M of venture debt
in senior or subordinated
venture debt
combination with your
equity financing
incremental to your senior
bank facility
Venture capital is typically the first source of institutional financing for startup companies. With strong venture capital investors, a technology bank lender will typically provide a term loan and/or receivables financing. Venture debt from Trinity compliments both forms of financing and provides significant value to shareholders and the technology banks.
Raise $3M to $30M of equipment capital
in senior or subordinated venture debt
combination with your equity financing
incremental to your senior bank facility
Venture debt, also known as venture lending, is a smart and critical source of financing for today’s entrepreneurial companies. It’s a type of financing that is offered to growth-stage venture capital-backed companies and allows a company to raise additional capital to supplement their equity financing and continue to fuel their growth trajectories.
Venture capital is typically the first source of institutional financing for startup companies. With strong venture capital investors, a technology bank lender will typically provide a term loan and/or receivables financing. Venture debt from Trinity compliments both forms of financing and provides significant value to shareholders and the technology banks.
Venture debt, also known as venture lending, is a smart and critical source of financing for today’s entrepreneurial companies. It’s a type of financing that is offered to growth-stage venture capital-backed companies and allows a company to raise additional capital to supplement their equity financing and continue to fuel their growth trajectories.
Raise up to $100M of venture debt
in senior or subordinated venture debt
combination with your equity financing
incremental to your senior bank facility
Startup Companies
Startup companies receive growth capital with minimal cost to the business and the added benefit of raising their next round of financing at a higher valuation, resulting in minimal equity dilution.
Venture Capital Firms
Venture capital investors benefit by maintaining their pro rata ownership in their portfolio company at less cost and bridging to the next key milestone without additional equity funds.
Technology Bank Lenders
Venture debt can be subordinated behind a senior technology bank lender and strengthens the balance sheet of their portfolio companies.
Benefits of Venture Debt
Senior and subordinated venture debt complement venture capital by extending the cash runway of a startup company to achieve the next milestone while minimizing equity dilution for employees and investors.
Fuel Growth
Provide growth capital with minimal equity dilution
Enhance Liquidity
Strengthens balance sheet and enhances liquidity
Extend Runway
Extend cash runway to achieve the next milestone
Non-dilutive Capital
Minimizes equity dilution for all shareholders
Increase Valuation
Bridges to next round of financing at a higher valuation
When to Raise Venture Debt
These are a few situations where venture debt is a viable financing option for entrepreneurs and their venture capital investors.
01
With Equity Raise
The best time to raise venture debt is concurrent with or immediately following an equity raise. Momentum is strong, diligence materials are in-hand, and cash is in the bank. Venture debt can augment a portion of the equity need and minimize equity dilution.
02
Between Equity Rounds
Venture debt can extend the cash runway of a startup company to achieve the next milestone achievement prior to their next equity raise, resulting in a higher valuation and less equity dilution.
03
Fund to Profitability
Venture debt can bridge a company to profitability. This is a great use of debt as it propels the company forward during a critical period of growth and can completely eliminate the need for a final round of equity financing.
02
Between Equity Rounds
Venture debt can extend the cash runway of a startup company to achieve the next milestone achievement prior to their next equity raise, resulting in a higher valuation and less equity dilution.
04
As an Insurance Policy
Venture debt can serve as an insurance policy to protect the company from potential mishaps or delays, thus eliminating the need for an emergency bridge round (or penalizing down round) and allowing the company to raise its next equity round once the company is back on track.
“ We understand every business has its unique challenges and things rarely go to plan, which is why we work closely with our portfolio to find solutions to help them thrive. ”
Kyle Brown
CEO