NAVIGATION

What is Venture Debt?

Definition

Venture Debt

Venture Debt is a type of debt financing provided to venture-backed startups, designed to extend runway between equity rounds without causing additional dilution.

Why It Matters for Startups

Directly dictates the cap table and dilution structure during fundraising; understanding Venture Debt helps founders model equity distributions when structuring rounds for runway extension alongside equity funding.

Detailed Deep Dive

Venture Debt is a type of debt financing provided to venture-backed startups, designed to extend runway between equity rounds without causing additional dilution.

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Frequently Asked Questions

Q:Who is eligible for venture debt?

Usually startups that have recently raised a priced equity round from institutional venture capital firms.

Q:Does venture debt require collateral?

It is typically secured against the company's assets and patents, and often includes warrants to purchase equity.

Quick Facts

  • CategoryFunding
  • Key ApplicationRunway extension alongside equity funding

Coverage Trend12 Weeks

12w agoToday

Related Startup Terms

Cite This Term

Reference this definition in your articles, research, or documentation to credit this source:

[Venture Debt | SPIDITS Glossary](https://spidits.com/startup-glossary/venture-debt)

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