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> the implosion of SVB et al took with it a lot of venture debt, which may result in unusual dilution down the road Can you explain what this means? Does it m
by umeshunni 3y ago
> the implosion of SVB et al took with it a lot of venture debt, which may result in unusual dilution down the road
Can you explain what this means?
Does it mean
(1) SVB used to a major holder of venture debt
(2) Now that they don't exist, no one is likely to buy venture debt
(3) therefore, companies have to issue more equity, leading to dilution
- choppaface 3y agoI’m not aware of banks as friendly today towards venture debt (really small business loans) as SVB et al were. There was probably a bubble in lending there in part due to crypto fraud. (VCs of course want this marketed as the Fed disrupting their house of cards through raising rates). Will start-ups just issue more equity? It could be more likely they simply fail to raise anything.