Venture Debt is a specialized type of private credit offered to venture-backed, high-growth companies. Unlike traditional VC, which is equity (selling a piece of the company), venture debt is a loan.
Its key appeal is that it provides a capital injection without requiring the entrepreneur to sell more equity (itÕs less dilutive). It is often used for short-term needs like working capital or to bridge a funding round. For investors in Venture Debt AIFs, it offers the yield of debt with an equity ‘kicker’ (warrants) for high potential returns.
