Following are the most frequently-asked questions about venture debt in general and Vencore Capital in particular:
- What is venture debt?
- What if we have not received institutional venture capital?
- How is Vencore different from a bank?
- What are the key terms of a typical Vencore deal?
- What other resources can Vencore offer our company?
- What types of assets does Vencore finance?
- Does Vencore require personal guarantees from company officers?
- What geographic areas does Vencore serve?
- How quickly does Vencore respond to prospective clients?
- How should our company apply?
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.
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.
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.
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.
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.
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.
A. We do not normally require personal guarantees.
A. Vencore has regional offices across the U.S. and serves clients throughout the country. For more information, see Contact Us.
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.
A. See Contact Us for information about how to contact us by phone, mail, or email.