• Slower or flat revenue trends
• Older or inactive equity support
• Shorter runway, OR
• A desire to defer an equity co-investment altogether
Our specialty is in putting together creative capital solutions for companies with unique stories to their credit profile.
Months on Average Since Our Clients Last Raised Equity
14
Industries & Sectors
Served
Companies Evaluated
Each Quarter
since 2021
• Banks are getting more narrow in their lending criteria
• Liquidity is a growing concern in the market
• Lenders are still aggressive on deals they like
• Companies who aren’t raising equity soon still have debt options
Current Market Conditions:
• Funding a company that needs cash without using their own capital
• Refinancing an existing, less friendly lender
• Funding a company to an exit or their next round
Debt facilities typically structured as a committed total amount with either the entire balance funded at close or structured in tranches based on milestones or company’s request of draws. This is the most common form of venture debt funded by debt funds, especially for the larger facilities ($10MM+).
Structured for flexible draws by the borrower, this is a committed facility designed to have little to no requirement for the company to utilize the capital but have as an insurance policy and ready access to funds when needed.
Specialty financing being used more frequently by companies to finance hard costs such as equipment or related expenses associated with driving revenue. This can include equipment, components and related soft costs for deployment. Used frequently by manufacturing, robotics and IOT companies.
• Term: 2- Years with renewal options
• Lien & Collateral: Equipment-Only
• Warrant Coverage: None
• Covenants: None
• IO Period: 6-24 Month
• Full Maturity: 36-48 Months
• Warrant Coverage: Less than 1% dilution
• Covenants: Minimal, if any
There’s a commonality in the venture debt market, where the majority of options lean toward companies with:
• $4MM+ in ARR ($7MM+ Revenue if non-SaaS)
• $2MM+ in Capital Need
• A history of business performance OR a story supporting future growth
• Some are in need of capital to get through their growth phase while avoiding a flat or down equity round if they go to the equity markets right now…that’s if equity is an option at all for them
• Companies with slower growth or flat revenue trends
• Companies with unique capital needs or business models
• Companies looking to refinance existing facilities with greater capital availability and friendlier terms
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