Uses of Venture Debt
2023 Market Conditions
Navigating today’s venture capital and debt investment climate. The rising cost of capital and the best practice use of venture debt
Extending Cash Runway
The classic use case for a round of venture debt is topping up an equity round to extend the cash runway
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The In-betweener
As the cliché goes, the road to success for a startup isn’t a straight path
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The Insurance Policy
The last post covered how a venture loan can provide additional cash runway
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To Avoid Setting a Valuation
Preventing a Bridge Round
Down rounds (or heavily structured "flat" rounds) are tough. Nobody likes them
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Ideally, as a startup grows its funding will take it to milestones that allow for more equity to come in a higher prices (what are called up-rounds)
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Bridging to Profitability
Acquisitions or Capital Expenditures
Large purchases of capital equipment – or even companies – are classic uses of proceeds from a loan
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This is for companies that are almost there.
So far the use cases covered have assumed that a startup will continue to raise more equity
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