MedTech Terms
    The authoritative reference
    All terms
    Investment & FinanceStartup Lifecycle

    Venture Debt

    Loan made to a venture-backed company, usually alongside or after equity.

    Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026

    Definition

    Venture debt is term debt provided by specialty lenders (SVB, Hercules, Trinity, Western Alliance) to venture-backed companies, typically sized at 25–35% of the most recent equity round, with warrants attached.

    What this means in practice

    Useful to extend runway between rounds without dilution. Risky if the company misses milestones - covenants and material adverse change clauses can accelerate repayment when cash is tight.
    Common pitfalls
    • •Drawing the full facility just because it's available, then carrying expensive debt without a clear use.

    Primary references

    3 sources
    Link health: 3 verified· last checked 2026-05-09
    SVB·2NVCA·1
    1. 1
      SVB: venture debt
      Verified
      SVBsvb.com
    2. 2
      NVCA Model Documents
      Verified
      NVCAnvca.org
    3. 3
      Silicon Valley Bank - Healthcare Reports
      Verified
      SVBsvb.com

    Inline markers like [1] jump to the matching reference above.