March 31, 2023
Breakfast
Opening Remarks
Presentation
A Technical Breakdown of Venture Debt Underwriting Models
- Underwriting models – Sponsor-driven vs. company fundamentals-driven vs. structured deals
- Similarities and differences / Pros and cons
- The benefits of properly structured venture debt to companies, management teams, investors, and lenders
- Use cases of different venture debt models for win/win/win results
Chief Operating Officer and Chief Investment Officer
Horizon Technology Finance
Speaker
Presentation
The State of the Venture Debt Market
- Current trends including what recent bank failures mean for the venture debt market
- Discussion of sector-by-sector loan performance
- Understanding the headwinds in the industry for both lenders and borrowers
- Sizing up current market sentiment, especially among equity investors
- How are things different today than they were only one year ago?
Presentation
Exploring Revenue-Based Funding for Recurring Revenue Business Models
- Overview of how the "RBF" strategy works
- Understanding the offer: funding amount, share %, average monthly revenue, repayment period
- Flat fee vs. variable collection
- Examples: revenue-based funding in action
Networking Break
Fireside
Exploring the Latest Trends and Opportunities in Venture Debt Financing
- Are we now in a lender friendly market?
- Are FinTech’s a threat?
- Post SVB landscape?
- Early stage vs late stage?
- Are big platforms like Black Stone, KKR, etc. serious about participating?
- Impact on fund raising?
- Is ESG is a factor?
Fireside
Highlighting the Differences Between Venture Debt Use in Banks vs. Funds
- Banks may have lower cost of capital
- Funds may not be as constrained by banks in the amount they can invest
- Who is typically more supportive – banks or funds?
- Understanding financial covenants
- Due diligence: just as important for investors as companies
Panel
Fundraising For Venture Debt Funds
- Explaining the value of your strategy to prospective investors
- Working with pension fund managers
- Promoting private credit venture debt funds as an attractive but separate asset class
- Focusing the fund on a specific market sector to attract savvy investors
- Partnering with VC firms: pros and cons
- Biggest concerns that equity investors and companies have when raising venture debt
Lunch
Panel
How the Collapse of Silicon Valley Bank will Impact Venture Debt Moving Forward
- Strategies SVB used to dominate the VC ecosystem for venture loans
- Sizing up the competitive landscape of non-bank lenders aiming to fill the void
- How venture debt investments will change in the wake of SVB’s failure
- Discussion of the logical buyers of SVB’s venture loan portfolio
- Analysis of why the current banking crisis will likely drive down private valuations
Founder, Managing General Partner & Chief Investment Officer
Applied Real Intelligence
Panelist
Fireside
Venture Debt From the Borrower’s Perspective: Winning a Deal
- Why professionals with a PE lending background are flooding into the market as “new lenders.”
- Is their familiarity with certain terms and structures (penny warrants, liens on IP) putting them at a disadvantage?
Fireside
Alternative Financing for Venture Debt
- Overview: Slowdown in VC capital opens path to alternative financing
- Best practices and capital strategies for financing venture debt businesses
- Operating and institutional capital perspectives on obstacles & opportunities
- Why lending decisions should be data-driven to increase speed to funding
- Managing rising risk in a rising rate environment
Networking Break
Presentation
How to Avoid Big Venture Debt Financing Mistakes
- Planning for a successful close in advance of a venture debt deal
- What’s different about venture debt diligence vs. venture capital diligence
- When and how to set up your data room
Presentation
Lender Landscape: The Current State of Small Business Lending by FinTechs
- Why FinTechs are typically faster to fund
- How your company builds credit when other scoring models are taken into account
- Streamlined operating structure removes many pain points for SMBs
- Blockchain systems and other tech enhancing security
- How FinTechs offer greater flexibility and customization to the small business customer
Presentation
Why Late-Stage Venture Lending is Still the Domain of Banks and Business Development Companies
- VC Firms still more likely to invest at expansion stage
- Biz dev firms and banks attracted to companies nearing a liquidity event (sale, IPO)
- Bank and biz dev solutions won’t cause dilution
- Understanding the role warrants play in late-stage venture lending
Presentation
Understanding the Targeted Marketing of Business Credit Cards to VC-Backed Startups
- How to define the addressable market for targeting business credit cards to startups
- What’s the best channel strategy to reach the target
- What are the key differentiators in the value proposition to attract this unique segment
- How to develop brand advocates to support social media marketing
- How to make credit decisions when your target market customers are pre-revenue
Closing Remarks
Cocktail Reception (Sponsored by Barnes & Thornburg)
Timely Topics and Innovative Programming
Here are some of the unique presentations and panel discussions we’re developing for The Venture Debt Conference:
- Industry dynamics: The size and shape of the venture debt market, historical performance and future growth projections
- Understanding the venture debt underwriting process: Creditworthiness and assessment of equity sponsors
- Understanding debt structures for working capital vs. growth capital
- Timing considerations: Raising debt alongside equity, raising between equity rounds, raising to fund an acquisition and the unique considerations of each approach
- Typical financing terms of venture debt and how they differ from traditional bank loans
- Common venture debt options including equipment financing, accounts receivable financing, and term loans
- How companies are using venture debt to extend their cash runway and minimize equity dilution
- The lender landscape: Commercial banks, specialty finance firms, alternative lenders, business development companies
- Exploring revenue-based funding for recurring revenue business models
- Senior venture loans vs. subordinated debt structures
- Royalty-based funding for life sciences companies
- Why late-stage venture lending is still the domain of banks and business development companies
- Using hybrid securities including convertible bonds, preferred stock, and debt with warrant kickers
- Understanding the use of convertible debt at both early and late-stage private companies
- Alternative lending structures including lines of credit, bridge loans, factoring, and merchant cash advances
- Understanding the targeted marketing of business credit cards to VC-backed startups
- How macro credit conditions and economic indicators impact the venture debt market
- Market participants: Lenders, underwriting and credit companies, loan servicers, and loan brokers
- Understanding possible headwinds in lending to startups including rising interest rates, increasing defaults, and reduced equity funding
- Evaluating the growth of the venture debt market by sector
The Venture Debt Conference program is currently in development.
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