Are you considering Venture Debt?
NICF has in-depth insight into how venture debt processes work - particularly within the European Investment Bank’s Venture Debt programme. Through ongoing client cases and continuous dialogue with both public and private lenders, we understand the requirements, internal dynamics, and documentation needed to move efficiently from first contact to credit approval.
1
What is venture debt?
Venture debt is a type of growth financing designed for scaleups that have already raised equity but want to extend their runway without giving away more ownership. It typically combines a loan with a small equity-linked component (warrants) and is used to fund expansion, R&D, or working capital between equity rounds or ahead of an exit.
2
Who is it for?
Venture debt is best suited for:
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VC-backed companies aiming to raise Series A/B/C.
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Founders preparing for a major round (EUR 30m+) or an exit.
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Companies with a proven product and recurring revenues min. EUR 2m.
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EBITDA negative companies with 2-3 years path to profitability.
3
Who is it for?
Venture debt is best suited for:
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VC-backed companies aiming to raise Series A/B/C.
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Founders preparing for a major round (EUR 30m+) or an exit.
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Companies with a proven product and recurring revenues min. EUR 2m.
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EBITDA negative companies with 2-3 years path to profitability.
4
How much does it typically finance?
Facilities usually range from €3 million to €50 million, depending on the company’s maturity, capital structure, and sector. Public lenders (e.g. EIB) often start from €10–15 million, while private venture debt funds and banks may go lower.
5
What are the typical conditions?
While terms vary by lender, typical parameters include:
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Interest rate: 4-10% per annum (potentially deferred)
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Equity kicker: Warrants or an exit fee
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Maturity: Typically 3–5 years
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Repayment structure: Mostly bullet
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Covenants: Financial and technical
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Lender IRR: 15–30%, depending on risk profile
6
How do we help?
Navigating venture debt is complex - lenders differ in eligibility, timelines, and terms. At NICF, we help scaleups:
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Assess readiness: identify if and when venture debt makes sense.
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Prepare materials: align forecasts, strategy, and equity story to meet lender expectations.
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Run the process: map relevant lenders, coordinate outreach, and manage negotiations.
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Optimise terms: benchmark interest rates, covenants, and warrants to secure the most efficient structure.