Boards and Venture debt (II/II)

How to secure a pre-agreed Venture debt financing in front of your Board of Directors. Less is more.

This post is the second part of (Boards and Venture debt (I/II). By now, you should be at ease with your Venture debt figures.

Find below the not so obvious advantages of a Venture debt beyond the economic benefit.

1. Venture debt has no political rights

Probably the most important reason why you should onboard a Venture debt provider is to release some pressure from the Exit. Venture debt investor holds no political rights and therefore you will be able to sell you company whenever you want.

Following Point Nine Capital SaaS Napkin scheme, you’ve been able to raise €2m at a Seed round at €6m (Post Money). Two years later you still need €5m ticket to grow fast and you are planning a Series A at a €20m.

Management stake would be reduced to 50% during the early-stage rounds

Expected exit of a Venture Capital fund if a company that has proven traction should be 5–10x their investment. In case you and your shareholders would receive a full-cash offer from a third party of €40m (Eur. Average B2B SaaS Exit 2019) the latest investor could potentially block the sale as he did not achieve his minimum return expectations.