WHY VENTURE DEBT

Venture debt is a financial tool used by equity investors and entrepreneurs to maximize enterprise valuation. They do so by exploring appropriate amounts of debt intended to accelerate the growth of their businesses.  Use of proceeds are most commonly applied to financing business essential assets, critical working capital needs or simply to extend the runway between rounds.

There is no one-size-fits-all methodology for building and funding disruptive technology, so let your business and our analysis work together to explore what makes the most sense.

Starting companies can be quite expensive. Deciding to invest further or tighten your spending can have consequences.

It can take much longer than anticipated for new technology to become validated and profitable, and raising rounds of financing at less than optimal times or engaging in more rounds than necessary can incur significant costs to the ownership interests of the founders and early investors.

Venture debt acts as a financial tool to aid in high growth businesses at a lower cost of capital than equity. The use of modest leverage at appropriate times will maximize enterprise value creation.  Using equity alone is too expensive relative to alternative strategies and this is why venture debt is used so often.  Financing of business essential equipment, runway extension between rounds or as supplementary working capital are most common uses of proceeds. 

Our approach to venture debt is one based on personal relationships and is focused on growing companies, not on engineering financial returns. We take the time to meet, learn, and understand the opportunities, risks and challenges faced when disruptive businesses are being born. It is not uncommon for us to spend countless hours getting to know early-stage companies as we seek to demonstrate our commitment in working with you and helping your company grow.

Given the true cost of capital and having the ability to use our funds, venture debt is comparably much cheaper than the alternative of equity. We urge you to explore your options at any time and begin forming relationships that will become the backbone of our efforts.

Seeking financing, contact Ryan McCalley