Venture Debt Refinancing

Emerging-growth companies have long used debt financing as a dependable means of extending cash runways, especially when the ebb and flow of markets injects uncertainty into when, where and how they will be able to raise new equity rounds. Recently, as competition in debt markets has increased, deep-pocketed lenders have been working to keep their term sheets competitive. Lenders are resetting the clock with new payment terms, extended periods of interest-only payments, and other attractive refinancing features. CFO’s who do their homework may find that negotiating more advantageous debt-finance deals can extend amortization schedules, free up cash flow and increase leverage and share value with less dilution.

Our research report last month on the 2016 Venture Debt Market Outlook painted a picture of a healthy market for corporate debt financing, with a growing number of lenders offering ever more sophisticated options for financing growth. This month, we provide a real-life example of how refinancing a venture debt package can be an effective strategy to smooth out inevitable bumps in the road to commercialization and profitability. Our new case study—Refinancing Properly Used—shows how we helped one company negotiate a refinancing deal that enabled it to manage a longer-than-expected product development cycle without having to access equity markets earlier than originally planned. We hope you enjoy it, and if you’d like to hear more about how we advise startup companies on their capital structures, please be sure to give me a call.

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Best Regards,

Ben Campbell
President & CEO