Venture Debt Definition | Espresso Capital

Venture debt is a form of non-dilutive financing designed specifically for early- and growth-stage companies that have already secured venture capital. It typically comes in the form of term loans and is used to complement equity rounds—not replace them. Startups often use venture debt to extend their cash runway, fund product development, hire talent, or bridge to a future equity round. Unlike traditional bank loans, venture debt doesn’t require positive cash flow or significant collateral. Instead, lenders like Espresso Capital evaluate a company’s growth potential, investor backing, and recurring revenue model to structure a tailored financing package.

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