The Ins and Outs of Venture Debt Financing.

Venture debt can be an important financing component for start-up financings. For start-ups and their shareholders, venture debt can be highly attractive due to tax advantages because of the speed of transactions and in order to avoid a dilution of shares. For lenders and their investors, venture debt offers high potential returns owing to high interest rates and the opportunity to participate in an increasing value of the start-up. This article, therefore, examines the basic principles and structure, the main features and contractual arrangements in connection with venture debt financings. [ABSTRACT FROM AUTHOR]