Venture Debt provides financing to emerging growth companies at a stage when they typically cannot qualify for traditional debt financing from a commercial bank or other traditional lenders. It mirrors the mezzanine finance facilities that large, established corporations utilize as a hybrid between debt and equity. However, Venture Debt is targeted at much younger and nimbler companies at pre-IPO / Buy Out stage and complements the equity financing they receive from traditional Venture Capital firms.

A Venture Debt loan enhances the cash buffer of a company over a limited time horizon and can help leverage the equity capital and increase the return for entrepreneurs and venture capital investors. It is routinely used to achieve certain milestones in a company's growth cycle e.g. bring company to the next technology / clinical trial stage, complete product commercialization stage, attain profitability or bridge the cash gap up to a Buy Out exit.