Venture debt guide for founders & CFOs
A practical venture debt guide for founders and CFOs. See when borrowing makes sense, how much you can raise, what it really costs, what lenders look for, and how to compare, negotiate and manage a facility.
Chapter 01
Understanding Growth Lending
What options exist across venture debt, growth credit and other debt solutions, which lenders provide them, and how they differ from raising equity.
- Start here6 min
Growth lending explained
A map of the debt market for high-growth companies: where venture debt, growth credit, bank lending and private credit overlap, where they differ, and what borrowers should examine beyond the label.
- 029 min
What is venture debt?
Venture debt is a loan for venture backed growth companies. This guide explains who uses it, how it works, what it costs and when the risks may outweigh the benefits.
- 036 min
What is growth credit?
Growth credit (often also referred to as growth debt) is debt for fast-growing private companies with more scale and repayment evidence than many early-stage borrowers. Here is how it works, who uses it and where it fits alongside venture debt in the broader private credit landscape.
How they compare
The market
- 087 min
Who provides venture debt?
Banks, specialist funds, institutional managers and public bodies all provide growth debt. Their capital and mandate shape which companies they finance — and how they behave.
- 097 min
What can growth or venture debt be used for?
A growth credit or venture debt loan can extend runway, fund a milestone, support working capital, finance equipment or enable an acquisition. The right use must also create a credible repayment route.
Chapter 02
Raising Growth Debt
From first conversation with venture debt and growth credit lenders through to signed loan agreements and the first drawdown.
01–03
Decide
Whether debt fits, and how much.
- 01
When should a growth company use venture debt?
Venture debt can be valuable when it funds a defined plan and remains repayable if growth or equity fundraising is delayed. Here is how founders and CFOs should decide.
7 min - 02
Is your company suitable for growth lending?
Growth lenders look for evidence that a company can create value with debt, survive a setback and repay. The answer changes from venture debt to later-stage growth credit.
6 min - 03
How much venture or growth debt can a company raise?
Growth debt is sized using different combinations of equity, cash burn, revenue, EBITDA, company value and repayment capacity. The safe amount may be below the lender’s offer.
7 min
- 01
04–07
Prepare
What lenders test, and how to get ready.
- 04
How growth lenders assess companies
Growth lenders assess far more than headline revenue. Here is how they test management, customers, cash, investors, downside risk and the company’s ability to repay.
7 min - 05
How to raise growth or venture debt
A practical guide to raising venture or growth debt, from defining the need and approaching suitable lenders through term sheets, due diligence, legal documents and drawdown.
9 min - 06
How to prepare a venture debt data room
A practical checklist for preparing a growth debt or venture debt data room, including financials, forecasts, customer data, ownership, existing financing and legal documents.
8 min - 07
Venture debt due diligence
What to expect from growth or venture debt due diligence across management, customers, forecasts, funding, legal review, security and downside analysis.
7 min
- 04
08–10
Choose & negotiate
Compare offers and agree terms.
- 08
Choosing a venture debt or growth credit lender
How to compare growth debt and venture debt lenders across capital certainty, total cost, structure, flexibility, reputation and follow-on capacity.
7 min - 09
How to compare venture debt term sheets
A practical framework for how to compare venture debt term sheets across cash availability, total cost, repayment, covenants, security and warrants.
10 min - 10
Negotiating a growth or venture debt facility
A founder-friendly framework for negotiating growth debt and venture debt across pricing, drawdowns, repayment, covenants, security, warrants and operating flexibility.
8 min
- 08
Chapter 03
Terms & Structures
Understand the terms of a debt facility and what they mean for your business.
- 019 min
Term sheets
A practical guide to reading and comparing growth debt term sheets — from facility availability and total cost to covenants, security, defaults, warrants and the route to closing across venture debt and growth credit.
- 027 min
Interest rates & costs
Growth debt and venture debt cost more than the headline interest rate. Understand benchmarks, margins, fees, PIK interest, final payments, prepayment and warrants.
- 037 min
Warrants
Venture debt warrants give lenders potential equity upside. Learn how warrant coverage, exercise prices, share classes, dilution and exit treatment affect the real cost.
- 044 min
Covenants
Understand growth debt and venture debt covenants, including reporting duties, restricted actions, minimum liquidity, performance tests, headroom and cures.
- 054 min
Security & collateral
Understand security and collateral in growth debt and venture debt, including all-assets packages, IP, cash, receivables, guarantees and lender priority.
- 064 min
Repayment
Understand interest-only periods, amortisation, bullet repayments and how different growth debt and venture debt repayment structures affect company cash flow.
- 076 min
Drawdowns & tranches
Understand growth debt and venture debt commitments, tranches, availability periods, milestones, drawdown conditions and fees on undrawn amounts.
- 086 min
PIK interest
Understand payment-in-kind interest, cash-pay interest, compounding and how growth credit facilities can combine different forms of interest.
- 098 min
Events of default
A practical guide to the clauses and issues that can put a growth debt or venture debt facility into default, the rights they create and the protections founders can negotiate.
- 108 min
Revolver vs term loan
A practical comparison of revolving credit facilities and term loans for growth companies, from drawdowns and repayment to working capital, runway and refinancing risk.
Chapter 04
Managing Growth Debt
After closing, learn how to manage your debt facility and stay on top of covenants, reporting and refinancing.
Business as usual
Running the facility day to day.
- 017 min
Managing growth debt after closing
How to manage a growth debt or venture debt facility after closing: payments, reporting, financial tests, lender consent and refinancing, explained in plain English.
- 025 min
Reporting to growth lenders
A practical guide to growth debt and venture debt reporting, covering management accounts, KPIs, forecasts, compliance certificates, covenants and event notices.
- 017 min
When plans change
Refinancing, amending and new equity.
- 034 min
Refinancing venture debt
A practical guide to refinancing growth debt or venture debt, covering timing, incumbent and new lenders, prepayment costs, payoff mechanics and refinancing risk.
- 044 min
Amending or extending a growth debt facility
Learn how growth debt and venture debt facilities can be amended or extended through waivers, covenant resets, maturity extensions and additional tranches.
- 056 min
Raising equity with debt outstanding
How outstanding growth debt or venture debt affects a later equity round, from lender consent and investor diligence to repayment, runway and closing.
- 034 min
When things go wrong
Breaches and repayment difficulty.
- 064 min
What happens if you breach a debt covenant?
A measured guide to growth debt and venture debt covenant breaches, including notification, cure periods, waivers, amendments and possible default consequences.
- 076 min
What happens if a company cannot repay growth debt?
Understand the options when a company cannot repay a growth credit facility or venture debt, from early lender engagement and restructuring to enforcement and insolvency.
- 064 min