What is Venture Debt and is it Right for You #22

Welcome to the Thunder Founder Newsletter Issue #22!

Are you a founder looking for funding options for your fast-growing startup?

If you have already raised a round or two, venture debt may be a useful tool to consider. Despite its name, venture debt is not the same as a traditional loan. Instead, it is a loan offered by banks or lenders specifically designed for early-stage startups with previous venture backing.

It is important to note that venture debt does not replace equity but is rather a complementary option that can be used for specific purposes. While equity rounds assume a liquidity event in the future and do not require immediate cash flows, loans are intended to help the founder achieve very specific goals or bridge the startup to a particular place. Venture debt can be particularly useful when a startup needs to execute a particular project within a specific timeframe, is not yet ready for the next equity round, or is experiencing a business cycle with peaks and valleys. However, it is crucial to find the right lender who understands the venture debt space and can provide reliable funding.

Check out our longer blog post covering the topic of venture debt here: Venture Debt Post

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What the Experts Have to Say

Venture Debt Financing: What Is It, and How Does It Work?

A good read to build your understanding of what venture debt is and how it works. Read More

When is venture debt right for your business?

Venture debt is not meant for every business or at every stage. This breaks down when venture debt could be appropriate. Read More

What is Venture Debt and Does it Still Matter in a Post-SVB World?

Venture debt has changed dramatically with SVB collapsing in 2022, but there are still players in the space that matter. Knowing who they are and how they operate is key. Read More

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Written by Jason Kirby - https://www.linkedin.com/in/jasonrkirby
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