How Startups Use Venture Debt

Venture debt, a core SVB business, is designed for high-growth startups.

When is venture debt right for you?

Venture debt is widely discussed in startup circles, but is often misunderstood. If you are a growing, venture-backed startup, find out if venture debt may be right for you.

How venture debt works

Venture debt is a loan designed for fast-growing, investor-backed startups. It’s most often secured during, or soon after, an equity round — and is typically used to extend runway to the next round.

50%

SVB banks 50% of US venture capital-backed companies with IPOs in 2017*

* Based on NVCA Data

Video in English only

Learn more about venture debt

Watch the video to learn how venture debt may help your company extend runway, accelerate growth and gain flexibility.

How do startups benefit?

Venture debt reduces the capital needed to fund operations and protects against operational glitches and unforeseen capital needs.

Fundraising Outlook

54%

of startup founders told SVB's 2018 Startup Outlook Survey that they expect their next round of funding to come from venture capitalists

Innovation takes ingenuity and sizable capital

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The basics

Venture debt is intended to provide three to nine months of additional capital to support investing activities.

Timing

Even in a time of abundant cash, venture debt is an attractive financing option for growing venture-backed companies that are seeking to extend runway, lower their cost of capital and keep innovation thriving.

Ratios

The venture-debt-to-company-valuation ratio typically hovers between 6% and 8% of the company’s last post-money valuation.

Venture debt insights

Our insights and research help you understand how industries and investors are driving change and how your business can benefit.

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See how SVB makes next happen now for entrepreneurs like you. Contact the SVB Canada relationship team today.

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