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As venture capital rebounds, what's going on with venture debt?

As venture capital rebounds, what's going on with venture debt?

As venture capital rebounds, what's going on with venture debt?
Oct 28, 2020 54 secs

Venture debt, in various forms, is a type of capital provided to startups that may or may not have raised equity-based funds, like venture capital.

So, when some survey data on the venture debt market from Runway Growth Capital came in, I started collecting my notes into a single entry.

Venture debt has a place in today’s market, but while venture capital is back to setting records, it appears that its less-known sibling won’t manage to match its last few years’ worth of results, according to new PitchBook data.

Its new survey of 493 entrepreneurs who had raised venture capital and 50 providers of startup capital from the VC and lending worlds noted that 60% of founders felt that “venture debt has become more founder-friendly,” which you might think would imply that more venture debt was being used, overall.

From the same survey, two related data points explain why venture debt has a place in the market: 86% of providers felt that “venture debt was key to extend the company’s runway to reach an important milestone,” while just over a quarter of founders agreed.

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