Up, Up and Away. Should You be Thinking About Venture Debt?

In May we sponsored the publication of the British Venture Capital Association (“BVCA”) report on “The Rise of Venture Debt in Europe”.  Copies of the report are available by clicking on this link.

The BVCA is the leading industry body and public policy advocate for the private equity and venture capital industry in the UK.

The report is the first to capture the overall size of the Venture Debt industry across Europe and was launched to a packed audience of BVCA members at Bootlaw Towers to raise awareness among the UK and European Private Equity industry of the availability and use of Venture Debt.

For those of you who haven’t heard of Venture Debt before. It’s been around since the 1960’s in the US but in Europe it is a more recent phenomenom.

The European Venture Debt industry officially launched in 1998 with the arrival of European Venture Partners (now Kreos Capital).  Since then a raft of other Venture Debt Providers have emerged on the scene including Silicon Valley Bank who entered the EU in 2005 and investments are now approximately US$1.5 billion across the EU.

The report is brimming with detailed facts and statistics about an industry in Europe for which information is not normally easy to obtain.  Of the many interesting facts to emerge the report revealed:

  • Close to 400 companies have received venture debt from UK venture lenders of nearly £1 billion [Ed – thats a lot of folding stuff].
  • Companies in the internet, biotech and semiconductor sectors had the highest average loan size.
  • Companies raising their second round of equity were the No.1 recipient of Venture Debt with only 18 investments made in companies in a Series A round.

The launch event included a panel discussion chaired by none other than our very own Bootlaw supremo Barry, a representative from the BVCA and three leading Venture Debt providers, ETV Capital, Kreos Capital and Noble Venture Finance.  The panel dispelled some of the myths surrounding the Venture Debt industry.

Ending on an upbeat note the panel confirmed that after economic turbulence of 2009 where activity in the Venture Debt market slowed (and mirrored the experience in the Private Equity market) in 2010 the Venture Lenders are very much open for business and looking for new deals.

As all Bootlawyers know Bootlaw Towers has a vibrant Emerging Growth company Venture Capital and Private Equity practice and is a recommended firm in the Legal 500 for Venture Capital and recognised as a team which “knows its tech inside out and targets start-up companies in the digital, new media, and emerging technology fields”.

So if you do decide to borrow some readies you know who to call (or tweet).

Leave a Reply

Your email address will not be published. Required fields are marked *