Venture Debt: A Bridge to Survival for Startups, or a Bridge to Nowhere for Lenders?

Learn more: breakingintowallstreet.com/ve...
This tutorial will give you a crash course on venture debt for VC-backed startups, including the key terms, the returns calculations, and the risks.
Files & Resources:
breakingintowallstreet.com/kb...
Table of Contents:
0:00 Introduction
1:20 Part 1: Venture Debt: The Short Version
3:35 Part 2: How Lenders Earn Returns with Venture Debt
5:35 Part 3: Venture Debt and the Cap Table
6:43 Part 4: Excel Example of Venture Debt Returns
13:40 Part 5: More Advanced Nuances in Cap Tables
14:20 Recap and Summary

[@financialmodeling]

Files & Resources: breakingintowallstreet.com/kb/venture-capital/venture-debt/ Table of Contents: 0:00 Introduction 1:20 Part 1: Venture Debt: The Short Version 3:35 Part 2: How Lenders Earn Returns with Venture Debt 5:35 Part 3: Venture Debt and the Cap Table 6:43 Part 4: Excel Example of Venture Debt Returns 13:40 Part 5: More Advanced Nuances in Cap Tables 14:20 Recap and Summary

[@Latin_American_Economic]

I would add that one of the biggest benefits for lenders is the deposit relationship. When the company raises a new round of capital those funds will be deposited at the lending bank because the lending relationship requires the firm operating account to be with the bank. Therefore if the firm continues to raise bigger rounds of capital then there is more deposits.

[@financialmodeling]

Thanks for adding that. Yes, that is a great point that the lender gets deposits from the startup relationship as well. Although I would say these depositor relationships mattered a lot more pre-SVB last year...

[@Latin_American_Economic]

@@financialmodeling you're welcome. The deposit relationship matter equally even now (I was at Comerica then FRB prior to FRB collapse covering funds lending and venture debt). Great video on the subject, I appreciate that since I cover that line of business unless you're in silicon valley very few people know about it.