Venture Loan Terms

By By Dennis McCarthy – (213) 222-8260 – dennis@mbsecurities.com –

The law firm, Latham & Watkins, has been a great source for valuable webinars. Recently, I highlighted one on preparing for the 2013 proxy season (link).  This time, however, Latham produced a useful print article on venture loans.

 A venture loan is a niche loan used by private companies, often venture-backed, to get capital which is less expensive than equity.

In the article, the authors provide a list of deal terms and valuable commentary as to what is most common, in their experience.

I was surprised to learn about a “change in management default”, apparently a frequent term.  But the article covers many issues including typical loan maturities, covenants, collateral, prepayment provisions, etc.

Again, thanks to Latham & Watkins for continuing to provide helpful materials on the capital markets.

As always, please contact me to help your company to complete any capital market project.

Link to article: Checklist of Venture Loan Terms with Commentary