E14: Ishpreet Singh Gandhi (Founder & Managing Partner, Stride Ventures)

Ishpreet Singh Gandhi is the Founder and Managing Partner at Stride Ventures, a venture-debt fund focused on lending to growth-stage startups with investments in companies such as Bira and Stellapps. He brings over 13 years of experience encompassing Banking, Private Equity and Venture Capital. During his last stint as Regional Head (North & East) at IDFC Bank, he spearheaded startup business by initiating lending business across Fintech, Consumer, Logistics and Agritech space. He has completed his Post Graduation from Delhi University (Delhi School of Economics) and Bachelors in Commerce from Delhi University.

Glossary of Terms:

1. Venture Debt: Venture debt is a form of debt financing for venture equity-backed companies that lack the assets or cash flow for traditional debt financing, or that want greater flexibility. A complement to equity financing, venture debt is generally structured as a three-year term loan (or series of loans), with warrants for company stock. Overall, venture debt is a form of “risk capital” that is less costly than equity when structured appropriately.

2. Covenant: Debt covenants are restrictions that lenders (creditors, debt holders, investors) put on lending agreements to limit the actions of the borrower (debtor). In other words, debt covenants are agreements between a company and its lenders that the company will operate within certain rules set by the lenders.

In this episode we will cover:

1. Ishpreet’s background and entry into venture capital

2. What are the differences between equity-based financing and debt-based financing?

3. What kind of startups qualify for venture debt

4. In spite of being founder friendly, why isn’t debt financing more popular than it should be

5. What steps is Stride Ventures taking to make debt financing mainstream?

6. How important is the cap table while evaluating a startup during debt financing?

7. When should a startup think about venture debt?

8. How does venture debt economics work?

9. How much should a startup at Series A raise in debt financing

10. Is venture debt for everyone? Are there downsides to it?