Using Venture Debt to <br>Create Value for Business

Using Venture Debt to
Create Value for Business

Venture Debt

Venture Debt refers to any form of debt financing provided to a company that is still dependent on Venture Capital (VC) financing to fund its operations. InnoVen Capital’s core offering is a medium term loan to VC-backed companies, depending on the stage of the company, quantum of equity raised and nature of the requirement. Interest rates and fees are fixed for the tenor of the loan. Repayment of the loan principal and interest payments are typically made on a monthly basis.sector agnostic approach, the preference is to partner with disruptive companies in Technology, Internet, Media, Healthcare and Consumer.
When is the right time for taking a Venture Loan?

When is the right time for taking a Venture Loan?

The target market for venture loans is typically when a company is generating revenue but does not have the years of operating history to obtain a traditional bank facility. Venture loans are generally taken alongside an equity financing round and can play a significant role in reducing equity dilution for founders and existing shareholders.
When is the right time for taking a Venture Loan?

When is the right time for taking a Venture Loan?

The target market for venture loans is typically when a company is generating revenue but does not have the years of operating history to obtain a traditional bank facility. Venture loans are generally taken alongside an equity financing round and can play a significant role in reducing equity dilution for founders and existing shareholders.
When is the right time for taking a Venture Loan?

When is the right time for taking a Venture Loan?

The target market for venture loans is typically when a company is generating revenue but does not have the years of operating history to obtain a traditional bank facility. Venture loans are generally taken alongside an equity financing round and can play a significant role in reducing equity dilution for founders and existing shareholders.
Understand Understand
Opportunity Opportunity
Purpose Purpose

When should I take a Venture Loan?

  • Use Case #1:
    Situation

    In this scenario, the company has just raised a Series A round, which is expected to extend its cash runway for 15 months at which point the company has projected to achieve a certain valuation. However, two months after closing its Series A, the company realizes that there is an opportunity to open a new market in the region (accelerate growth), and wants to seize the opportunity but did not allocate extra cash to do so. The company is left with a predicament – it can either use its Series A funds towards accelerating growth and thus reducing its cash runway to less than 15 months, or it can decide to miss the opportunity and therefore also miss the potential to increase its valuation.

    Situation

    In this scenario, the company has just raised a Series A round, which is expected to extend its cash runway for 15 months at which point the company has projected to achieve a certain valuation. However, two months after closing its Series A, the company realizes that there is an opportunity to open a new market in the region (accelerate growth), and wants to seize the opportunity but did not allocate extra cash to do so. The company is left with a predicament – it can either use its Series A funds towards accelerating growth and thus reducing its cash runway to less than 15 months, or it can decide to miss the opportunity and therefore also miss the potential to increase its valuation.

  • Use Case #2:
    Situation

    In this scenario, the company has just raised a Series A round, which is expected to extend its cash runway for 15 months at which point the company has projected to achieve a certain valuation. However, two months after closing its Series A, the company realizes that there is an opportunity to open a new market in the region (accelerate growth), and wants to seize the opportunity but did not allocate extra cash to do so. The company is left with a predicament – it can either use its Series A funds towards accelerating growth and thus reducing its cash runway to less than 15 months, or it can decide to miss the opportunity and therefore also miss the potential to increase its valuation.

    Situation

    In this scenario, the company has just raised a Series A round, which is expected to extend its cash runway for 15 months at which point the company has projected to achieve a certain valuation. However, two months after closing its Series A, the company realizes that there is an opportunity to open a new market in the region (accelerate growth), and wants to seize the opportunity but did not allocate extra cash to do so. The company is left with a predicament – it can either use its Series A funds towards accelerating growth and thus reducing its cash runway to less than 15 months, or it can decide to miss the opportunity and therefore also miss the potential to increase its valuation.

  • Use Case #3:
    Situation

    In this scenario, the company has just raised a Series A round, which is expected to extend its cash runway for 15 months at which point the company has projected to achieve a certain valuation. However, two months after closing its Series A, the company realizes that there is an opportunity to open a new market in the region (accelerate growth), and wants to seize the opportunity but did not allocate extra cash to do so. The company is left with a predicament – it can either use its Series A funds towards accelerating growth and thus reducing its cash runway to less than 15 months, or it can decide to miss the opportunity and therefore also miss the potential to increase its valuation.

    Situation

    In this scenario, the company has just raised a Series A round, which is expected to extend its cash runway for 15 months at which point the company has projected to achieve a certain valuation. However, two months after closing its Series A, the company realizes that there is an opportunity to open a new market in the region (accelerate growth), and wants to seize the opportunity but did not allocate extra cash to do so. The company is left with a predicament – it can either use its Series A funds towards accelerating growth and thus reducing its cash runway to less than 15 months, or it can decide to miss the opportunity and therefore also miss the potential to increase its valuation.

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