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I've never heard of a VC leveraging up with borrowed money. Who would be on the hook if the fund loses money?
by HockeyPlayer 13y ago
I've never heard of a VC leveraging up with borrowed money. Who would be on the hook if the fund loses money?
- ganeumann 13y agoVCs' portfolio companies often raise debt. This is called venture debt and the lenders are banks like Silicon Valley Bank. VCs tend to have a love/hate relationship with venture debt. On the one hand, it means they suffer less dilution as the company grows; on the other hand, it means their investment gets riskier just at the point where they are finally de-risking the company.