Bessemer Guide To Venture Debt
Bessemer Guide To Venture Debt
Bessemer Guide To Venture Debt
There's an adage that says your first job as a startup CEO is to make sure your company
never runs out of cash. But when financing a growing company, venture debt can be a great
supplement to venture capital and in some cases may be a necessity. Much has been written
to help founders think through venture capital, but venture debt remains a bit of a black box.
That's why we partnered with our friends at http://www.clpgrowth.com/
Columbia Lake Partners, a leading European
venture debt fund, to put together a white paper that helps startups approach venture debt
in a thoughtful way.
For those of you short on time, below is a summary. And for the finance geeks among you,
weve put together a https://bvp.box.com/BVPVentureDebtModel
Venture Debt Model for you to assess the true cost of venture debt.
https://bvp.box.com/BVPVentureDebtModel
SUMMARY
Why venture debt?
Venture debt refers to a variety of debt
financing products for venture-backed
companies. Typically, venture debt is
provided by banks or dedicated venture debt
funds as a complement to equity financing. It
can act as an attractive way to finance a
business with less dilution than equity and
does not require a valuation to be set for the
business. Additionally, venture lenders dont
take board seats and have few governance
requirements. But like any loan, venture debt
needs to be repaid with interest over time.
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Market Rate
Interest Rate
Duration
3-4 years
Amortization
Closing Fees
0%-1%
Warrants
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http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
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http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
http://www.adventurista.com/2009/01/true-cost-of-venture-debt-part-ii.html
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Explanation
Origination
Prepayment
Waiver /
Default
A penalty if a company
underperforms or breaches a
covenant and is in default.
Market Rate
Interest Rate
Duration
3-4 years
Amortization
Closing Fees
0%-1%
Warrants
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Weve covered the basics in this white paper. If you have any thoughts or questions, email the
authors at [email protected] and [email protected].
http://www.clpgrowth.com/our-blog/
And check out the Columbia
Lake Partners blog for a more detailed series of posts on all
things venture debt.
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APPENDIX A:
Active Venture Lenders in the US and Europe
Lender
Geographic
Focus
Institution
Type
Link
United States
Bank
http://www.svb.com/
Comerica
United States
Bank
https://www.comerica.com/
United States
Bank
https://www.cnb.com/
United States
Bank
https://www.square1financial.com/
Eastward
United States
Fund
http://www.eastwardcp.com/
Escalate
United States
Fund
http://www.escalatecapital.com/
Gold Hill
United States
Fund
http://www.goldhillcapital.com/
Hercules
United States
Fund
http://www.htgc.com/
Horizon
United States
Fund
http://www.horizontechfinance.com/
Lighthouse
United States
Fund
http://www.lcpartners.com/
MMVF
United States
Fund
http://mmvf.com/
NXT
United States
Fund
http://www.nxtcapital.com/
ORIX
United States
Fund
http://www.orix.com/
TriplePoint
United States
Fund
http://www.tpt.com/
Wellington
United States
Fund
http://www.wellingtonfund.com
WTI
United States
Fund
http://www.westerntech.com/
Europe
Bank
http://www.svb.com/
Barclays Bank
Europe
Bank
http://www.barclays.com/
Europe
Fund
http://www.clpgrowth.com/
Kreos
Europe
Fund
http://www.kreoscapital.com/
Harbert
Europe
Fund
http://www.harbert.net/
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APPENDIX B:
Other Helpful Resources
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