It turns out that pre-seed funds are filling a really important niche in the market. These firms actually help increase the velocity of the earliest stages of venture capital. Greasing the wheels of Silicon Valley, in a way.
The COVID crisis has dramatically slowed down early-stage venture activity.
Fintech companies have special needs when raising funding that they are going to use to loan money out to their clients - often called “equity and debt staircase”.
A lot of times venture lenders, they're smart. They know when they find a good deal when they've done a loan with a good startup, they want to get a little piece of the equity too.
Pre-payment means that you're going to pay back your loan early. You know, typically, when a venture lender makes a deal, they project out the total interest they're going to capture over the life of the loan, and that's their return.
The rationale for a warrant coverage or a little bit of equity upside for the lender is that they're taking a lot of risk here.
We are seeing several new trends in the due diligence that venture capitalists do prior to completing a deal. Kruze is in a unique position to notice new venture capital trends since our clients have raised over $3.5 billion in early-stage funding.
This month we surveyed nearly 30 Bay Area CFOs to find out their predictions for all things tech in 2020. One question that drew particularly enthusiastic responses was: What’s the next new U.S. tech hub?
Kruze Consulting is 100% focused on helping seed and venture funded Delaware C-Corps with their accounting needs.
A big part of my job at Kruze is to help our clients prepare to raise venture capital. So I’ve seen a lot of venture capital pitch decks recently.
Kruze Consulting’s clients have raised over $500 million in venture and seed funding in the past 12 months, and we’ve worked with top venture capitalists who have invested in our clients.
Today we're answering the question: Why do VC's prefer to invest in Delaware C-Corporations instead of LLC's or S-Corps.
TriplePoint Capital is a Sand Hill Road-based global financing provider to high growth venture capital-backed companies throughout their lifespan, providing customized debt financing, leasing, and direct equity investments.
At Kruze Consulting, we put a lot of effort into creating content that we hope will help startup founders. This includes Scott Orn’s Founders and Friends podcast series, our startup Q&A and our videos.
Silicon Valley Bank helps innovative companies and their investors move bold ideas forward, fast.
Today we're talking about the dangers of venture debt. Now that sounds really scary. Venture debt's actually a great tool for prolonging your runway and making sure your startup can hit the right milestones.
Today we're talking about events of default in venture debt. Now an event of default is when you get put in the penalty box and the lender controls your destiny. They can make you fundraise. They can make you sell the company. You do not want to be in default. So, stay out of default is rule number one.
Today we're talking about fund venture lenders vs. bank venture lenders. Now, banks, they're always really really cheap. They have low interest rates and low warrant coverage and that's partially because they are lending out other companies’ deposits. They take one company's deposits and lend it out to another. That's how banks work in just about everything. So that way their cost of funding is very very low.
Let's talk about warrant coverage in a venture leaning deal, and whether the warrant coverage should be based on usage or commitment.
This is your scouting report for Square 1 Bank and their venture debt services.
Comerica is a huge venture lending firm, they've been doing it for a very long time, dating all the way back to when they acquired Imperial Bank.
City National Bank is a great group to work with. They're led by Rod Werner, who's the consummate Silicon Valley deal-maker.
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.
All of our clients know to call us but there's a lot of people out there or a lot of startups that don't know that we do this on an ad hoc basis.
WTI has been around for I think about 30 years. They're one of the major players in the VentureNet market, and they specialize in doing very large deals and very flexible deals.
Triplepoint's a very large fund, a very aggressive lender in the venture debt marketplace.
SVB is one of the largest players in the venture debt market. They've been servicing start-ups for many, many years.
For those who don't know, a liquidation preference gives a venture capitalist the right to get their money back before other shareholders.
A minimum cash requirement is something that usually a bank will ask the company to do.
Material adverse change clauses, or MAC, is the one term you do not want to have on your term sheet.
We talked about MACs as an event of default. You definitely want to avoid those. But almost equally dangerous is the funding MAC.
The idea behind a final payment is that the lender will backload some of the interest.
The first thing they're going to ask for is your historical financials.
At Kruze Consulting, we get tons of questions about venture debt. Should a startup take it? Is it good for the startup?
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