What is a venture debt?

A venture debt loan is a type of financing designed for high-growth startups, scaling tech companies, and high-margin service businesses that have already raised venture capital. Unlike equity funding, venture debt is non-dilutive, giving founders the capital they need to extend their cash runway, fund hiring, marketing, R&D, or acquisitions without giving up ownership or control.

At Forge Capital, we specialize in venture debt loans with competitive rates and flexible terms, helping founders access growth capital quickly and efficiently.

What is the difference between venture debt and venture capital?

Venture debt is a loan offered to fast-growing investor-backed startups – also referred to as venture-backed startups. Venture debt provides them with access to non-equity capital with minimal dilution to support growth until the next equity round. It complements equity financing but doesn't replace it.


Venture capital, on the other hand, is an equity investment where investors receive ownership stakes in the company. While venture debt requires repayment with interest, venture capital returns are realized through exit events like acquisitions or IPOs.

How does venture debt differ from traditional bank loans or equity financing?

Venture debt assesses a company’s growth potential and future funding ability, unlike traditional loans that underwrites to cash flow and collateral. Venture debt offers flexible debt capital with less dilution than equity financing. Venture debt bridges gaps between equity rounds without selling ownership stakes or board seats.

How does venture debt work?

Venture debt is a complementary financing option to equity rounds. Loans are typically structured with:

An interest-only period followed by repayment.

Warrants for potential equity upside, compensating lenders for higher risk.

With Forge Capital’s multi-lender application, startups can easily compare multiple venture debt offers to find the best interest rates and loan terms for their growth plans.

What can venture debt be used for?

Venture debt provides flexible capital to help companies:

• Extend runway and maintain operations until the next equity round.

• Accelerate growth initiatives, including marketing, sales, product development, and key hires.

• Acquire complementary companies or technologies.

Forge Capital’s platform streamlines the search for the right venture debt solution, helping you secure funding that aligns with your strategic goals.

What are the key benefits of venture debt?

Venture debt offers several advantages over traditional financing:

• Preserves ownership – maintain equity and control while accessing capital.

• Flexible terms – repayment schedules and covenants are designed for startups.

• Growth capital – unlock significant funding to fuel expansion.

Using Forge Capital’s multi-lender application, founders can compare multiple lenders, ensuring they receive the most favorable terms and lowest interest rates for their business.

What should founders consider before taking venture debt?

Before taking venture debt, founders should understand:

• Repayment obligation – unlike equity, venture debt must be repaid.

• Interest rates – typically range from 10% to 15% due to higher risk.

• Lender compensation – warrants may be included to provide potential equity upside. Most of our lenders do not use warrants.

Will venture debt affect my ability to raise future equity rounds?

When used strategically, venture debt can enhance your ability to raise future equity by extending your runway and helping you achieve key milestones. It signals financial stability and may increase appeal to investors. However, excessive leverage can deter future investors, so it's important to manage debt responsibly. Remember, debt is a liability that future investors will consider.

When should I raise venture debt

The optimal time to raise venture debt is shortly after closing a new equity round, as this enhances bargaining power and provides strategic flexibility. Avoid waiting until cash reserves are low, as this can limit negotiating positions and increase costs, or even potentially risk eliminating the availability of venture debt.

How much venture debt should you raise

* A common range of venture debt is 20-40% of your last equity round or 6-8% of your post-money valuation. For example, if you raised a $20M equity round, you might consider $4M-$8M in venture debt.

* Aim for debt that adds approximately six months of runway – but most lenders expect you to have at least 12 months of organic runway in addition to the debt.

How can Forge Capital help me find the best venture debt loan?

Forge Capital offers a multi-lender application that simplifies the venture debt process. Startups can:

• Compare multiple lenders in one place.

• Find the lowest interest rates and most flexible terms.

• Secure funding quickly without giving up equity.

Our mission is to help founders access non-dilutive growth capital efficiently, empowering them to scale their business on their terms.

What are the requirements for a venture debt

While each lender has its own criteria to qualify for venture debt, they generally include: 

Having raised a single equity round, or self funded.

Backing from reputable venture capital firms.

Demonstrable growth trajectory.

Clear plan for using the debt to reach significant milestones.

Making at least $10K monthly recurring revenue

Why should I choose Forge Capital to find venture debt that fits my company’s needs?

Forge Capital makes finding the right venture debt simple, transparent, and founder-friendly. Instead of navigating lenders alone, we connect you with our multi-lender network to match your startup with the best loan options, lowest interest rates, and most flexible terms — all through one easy application.

Our team of entrepreneurs, investors, and operators understands the realities of scaling. We look beyond your balance sheet to understand your goals, growth potential, and business model — ensuring you get capital that truly fits your stage and strategy.

Plus, through our partnership with Flowbot Forge, we don’t stop at funding. We provide wraparound sales and marketing automation and consultations to help you grow revenue, hit milestones, and scale to millions in ARR.

At Forge Capital, we’re not just lenders — we’re partners in your growth, helping you build, fund, and scale your business with confidence.