Frequently Asked Questions

Following are the most frequently-asked questions about venture debt in general and Vencore Capital in particular:

Q. What is venture debt?

A. Venture debt is a broad term that describes loans and leases provided to emerging-growth companies at a stage when they typically cannot qualify for debt financing from a commercial bank. Venture debt can be structured as a lease or a loan. It gives early-stage, emerging-growth companies the capital they need to undertake strategic initiatives, develop product, acquire equipment, build out infrastructure, and expand into new business markets.

Venture debt is sometimes focused on equipment financing and is structured as a loan or a lease. Other times, venture debt provides working capital and is typically structured as a growth capital loan. In either case, it can help founders and early investors avoid dilution through an infusion of cash that "extends the runway" between equity rounds.

For venture capitalists, venture debt leverages equity capital investments, providing stability to their portfolios by adding additional financial resources. In addition, venture debt augments equity returns through its lower capital costs.

Q. What if we have not received institutional venture capital?

A. A company does not need to have raised traditional institutional venture capital before establishing a relationship with Vencore. Many of our clients are self-funded, have received only seed funding, or are funded by angels, grants, or corporate investors.

Q. How is Vencore different from a bank?

A. Vencore is a provider of growth capital and equipment financing and is not the same type of service provider as a bank. We understand the risks, challenges, and opportunities companies face in their early years, and our products are designed for companies that do not yet qualify for bank term loans. If a company does qualify for bank financing, a good option is to finance equipment with Vencore and use a bank for a short-term operating line of credit secured by accounts receivable.

Q. What are the key terms of a typical Vencore deal?

A. Our deals range in size from $50K to $2M. The term typically ranges from 24 to 36 months. Our compensation includes commitment fees, interest income, and warrants. We occupy the space between a commercial bank and an equity investor. We take more risk than a bank and dilute equity less than venture funding.

Q. What other resources can Vencore offer our company?

A. Through its strong presence in cities throughout the U.S., Vencore has formed relationships with commercial real estate firms, attorneys, and organizations that provide interim management expertise to early-stage companies. In addition, because we are well known by many angel groups and other venture capital providers, we can often help companies rise above the "noise level" by making appropriate introductions.

Q. What types of assets does Vencore finance?

A. Companies use cash raised from Vencore loans and leases for asset purchases and working capital.

Vencore finances most types of fixed assets, including computer hardware and software and telecommunications hardware. We also finance manufacturing, laboratory, office, and test and measurement equipment.

Our growth capital loans are generally secured by all corporate assets. The cash from the loan is used for working capital purposes such as paying salaries and other costs associated with product development and roll-out.

Our bias is to get the deal done and find creative ways to make that happen.

Q. Does Vencore require personal guarantees from company officers?

A. We do not normally require personal guarantees.

Q. What geographic areas does Vencore serve?

A. Vencore has regional offices across the U.S. and serves clients throughout the country. For more information, see Contact Us.

Q. How quickly does Vencore respond to prospective clients?

A. Vencore can complete the approval process within a week after initial discussion, person-to-person meetings, and a review of your company's data.

Q. How should our company apply?

A. See Contact Us for information about how to contact us by phone, mail, or email.

Vencore has saved us tens of thousands of dollars in up-front costs and allowed us to accelerate our research programs. Eric Speer calmly and carefully walked me through the financing arrangement. It was completely new to me as a first time entrepreneur, and it has served us very well over the last 14 months.”
Scott Thacher, Ph.D.
CEO
Orphagen Pharmaceuticals