Venture Debt Fit to Outpace Wider VC Market

An article written by Venture Capital Journal. Read the full article here.

Venture debt is growing faster than traditional equity financing and faster than the wider VC market, according to a recent PitchBook report titled Venture Debt a Maturing Market in VC.

It thus “makes sense that the growth of venture debt has outpaced the broader VC market,” the report noted. “More companies receiving institutional venture backing equals more potential borrowers for lenders, in many ways making venture debt a dependent variable.”

The PitchBook report claimed venture debt has been split evenly between early and late-stage companies over the last decade in terms of financing count. ButPitchBook’s methodology treats convertible loans as venture debt, which is hugely popular in the early-stage.

“Recently, even seed-stage loans have caught up [to late stage], largely because of the increased use of convertible notes for these investments,” the report said.

Read the full article here.