David Spreng
Contributor
David Spreng is a seasoned venture and growth debt lender with 30 years of experience, the founder and CEO of Runway Growth Capital, and the author of All Money Is Not Created Equal.
The first step in the process of raising venture debt is a quick, introductory filtering phone call between you and the potential lender that’s an equal amount selling and listening – on both sides.
Think of it like a first date. Should that go well, it should then be followed up quickly with both parties signing an NDA. (VCs don’t like to sign NDAs, but venture debt lenders don’t have a problem with it.)
At this point, we would start our initial due diligence. We typically ask a company for six things:
An investor presentation
If you are looking for investment money, you probably have recently raised equity. The investor deck you would have used for that works for venture debt as well. (There are numerous examples online.)
The 409A
The annual valuation of the equity value of the company, designed to protect employees who …
