How Venture Debt Financing Works and How To Get It
When a venture capitalist invests in an early-stage company, the structure set forth in the 
term sheet is usually in preferred stock. These securities have a variety of protections—such as liquidation preferences and voting rights—that provide venture capitalists with 
downside protection and control. Because of the high risks involved in startups, the VC wants the opportunity to get a big return when a company is eventually sold or goes public.
At the same time, there are a growing number of venture firms that don’t just focus on equity investments—they will also provide startups with something called venture debt financing. Venture debt usually comes as a part of a Series A or Series B investment and will be 20% to 30% of the total. Often it is for companies with strong financial backing, such as from VCs. Or it could suit non-funded companies that have a customer base. Venture debt is also available from other funders, not just VCs. Read full story:
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