OLNS #1 – Venture Debt for Tech Companies

Orrick Legal Ninja Series | May.27.2019

For emerging technology companies, gaining access to financial resources is a key challenge. Traditional bank loans are often unavailable, and the financial means of the founders are usually limited. An (equity) financing by institutional venture capital investors often represents the most expensive form of capital.

Orrick Legal Ninja Series #1Venture Debt is a potentially attractive complement to equity financings for business startups that already have strong investors on board. It is a highly flexible instrument with very little dilutive effect for founders and existing investors.

OLNS#1 focuses on Venture Debt and includes practical tips and legal considerations based on years of experience counselling high-growth companies and their investors across the globe. Topics include:

  • What is Venture Debt
  • Advantages of Venture Debt Financing
  • Disadvantages and Risks of Venture Debt Financing
  • Customary Terms and Conditions and Drafting Tips

In preparing this issue of the OLNS, our international and cross-functional Orrick team drew on experience representing more than 2,600 tech companies globally, as well as the world’s leading venture and private equity investors. Founded in the Bay Area, Orrick is one of the world’s leading technology law firms, and ranks #1 for European venture capital transactions (PitchBook).

For an overview of our German Technology Transactions practice including recent transactions and further publications click here.