Venture Debt Scouting Report: Bridge Bank

Fri, 9 February 2018 - Scott Orn

Video: What Should You Know about Bridge Bank as a Venture Debt Lender?

Bridge Bank has been a venture lender for a long time, but they used to be a much smaller bank. Recently they were acquired by a large bank, so their balance sheet is really big so they can do much bigger deals.

They’re very aggressive and definitely someone you want to talk to. Our representatives on the West Coast is Mike. Mike’s been around venture debt for a very long time, he’s a great guy, and easy to work with so I definitely recommended talking to Mike. In terms of things you should think about, pros and cons for Bridge Bank.

You know they have the same low cost of capital that most banks offer. They also do low warrant coverage. So it’s a very affordable, easy to work with a solution. The one negative is typically they’ll use a MAC clause or investor abandonment as part of the deal. Sometimes covenants as well.

However, you’re usually gonna get that when you’re doing a bank term sheet, so there’s nothing abnormal. It’s not a knockoff Bridge Bank, that’s just how banks lend money to startups. So again, great team. We really like working with Mike. They’ve been around for a very long time. They have a much bigger balance sheet now. They’re very affordable, with low warrant coverage and low-interest rates.

And again, you do have to keep in mind the Material Adverse Change clause or investor abandonment, if that’s in the deal.

 

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