Navigating Venture Debt for Tech Startups

This chapter explores the intricacies of venture debt, contrasting Business Development Corporations (BDCs) with traditional banks in their lending approaches. It highlights how technology firms can leverage venture debt to enhance equity valuation and underscores the importance of cash reserves and unique performance metrics in borrowing strategies. Additionally, the chapter addresses recent shifts in the venture debt landscape influenced by market changes and competitive banking dynamics.

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The venture debt landscape has changed dramatically over the past few years, and CFOs can’t afford to be left behind. Catherine Jhung, Senior Managing Director at Hercules Capital and a seasoned expert in venture lending, joins CJ to explore the landscape of venture debt in 2025. Together, they unpack important questions for CFOs approaching lenders, the delicate balance between rate and flexibility, and a surprisingly overlooked use case for venture debt. You’ll also hear when not to raise debt, how to determine the right amount for your capital stack, what really separates banks from private debt funds, and the complex dance between VCs and debt providers. Plus, Catherine sheds light on the concept of capital as a commodity and how her early career in sales shaped her approach to selling the one thing every company needs: capital.

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LINKS:

Catherine Jhung on LinkedIn: https://www.linkedin.com/in/catherine-jhung-she-her-434732/

Hercules Capital:

https://www.htgc.com/

Ventured Growth: https://www.htgc.com/category/podcast/

CJ on X (@cjgustafson222): https://x.com/cjgustafson222

Mostly metrics:

http://mostlymetrics.com

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