Venture Debt
Loan financing extended to venture-backed startups, typically alongside an equity raise, that supplements equity funding without further diluting ownership.
Venture debt lenders usually require the business to have already raised institutional equity funding, since the loan is underwritten in part on the strength of the company’s investors and its equity runway, not on cash flow or collateral in the traditional sense.
It’s typically used to extend a startup’s runway between equity rounds or fund a specific growth initiative, letting founders raise less equity than they otherwise would and preserve more ownership.
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