About Venture Debt

Key benefits that venture debt offers to management teams of equity-sponsored companies include:

  • Preserves control and economic upside for investors, founders and employees, and is the least dilutive financing option
  • Extends the cash runway of the company and supports the achievement of upcoming value milestones
  • Offers a “bridge” between equity rounds - rather than issuing equity to finance upcoming growth, the company may be able to raise equity at a higher valuation after a key milestone has been achieved (thus further minimizing dilution)
  • Supplements an existing equity round, allowing venture capital investors the ability to both leverage their investment – and preserve dry powder for future needs of the company

Venture debt structure (characteristics of a typical venture debt loan):

  • Par amount – up to $50M or potentially greater with specific lenders and/or syndicates
  • Total duration – up to 60 months
  • Amortization structure – initial interest-only period up to 36 months, with level amortization thereafter
  • Coupon, facility fee, and final payment fee – cost should be evaluated on all-in basis
  • Warrants or success fee from 2-4%
  • Security – typically a lien on all assets, other than intellectual property; negative pledge on intellectual property (other company-specific structures or carve-outs may be included)

Additionally, companies may be able to arrange lines of credit secured by accounts receivable, inventory, or PP&E.

Bridge Bank is one of only a few commercial lenders who has deep expertise in venture debt lending, and offers the flexibility in terms of deal size, repayment (duration, interest-only period), and cost structures (coupon, fees) that management teams need in order to maintain access to capital throughout the ups and downs of the growth cycle.

  • Recent News
    Bridge Bank company logo red black and white
    Bridge Bank's Business Escrow Services Group Launches New Paying Agent Platform
    Bridge Bank company logo red black and white
    Bridge Bank Extends $12,000,000 Credit Facility to Ellevation
    Bridge Bank company logo red black and white
    Alex Tsarnas Joins Bridge Bank Team to Lead Its Newly Established Banking Group, Business Escrow Services
    Bridge Bank company logo red black and white
    Bridge Bank Expands Capital Finance Group Adding Several New Positions
    Bridge Bank company logo red black and white
    Bridge Bank Extends $25,000,000 Credit Facility to Health-Ade
    Bridge Bank company logo red black and white
    CloudBolt Announces $35 Million in Series B Funding
    Bridge Bank company logo red black and white
    Bridge Bank Hires Tech Banker Jon Berry, Builds on Growth Momentum in Austin
    Bridge Bank company logo red black and white
    Bridge Bank Expands Equity Fund Resources Group Hires Dragomir Sipovic, Vice President
    Bridge Bank company logo red black and white
    Bridge Bank Extends $2MM Credit Facility to Miva, Inc.
    Bridge Bank company logo red black and white
    Bridge Bank Extends Venture Term Loan to Deep Lens, Inc.
  • Recent Insights
    CytoSorbents-insights
    CytoSorbents Delivers Technology to Calm the Storm
    masterclass-insights
    MasterClass Streams Inspiration When It's Needed Most
    Leaving LIBOR
    Leaving LIBOR: 4 things to know about changing interest rate benchmarks
    california-2020
    Regional Intelligence Report Series: California Outlook
    south-bay-2020
    Regional Intelligence Report Series: South Bay Outlook
    CybersecuirtyWebinarInsight Article324x259819
    Protect Your Data: The Cybersecurity Webinar
    Protect Your Organization Against Data Breaches and Cybercrime Scams
    Fight Payment Fraud Within Your Organization
    Safeguard Your Business Against Bank Fraud
    How To Sidestep A Business Email Compromise Scam
  • Get Started