Runway Growth Capital’s Post

“There are a few important red flags that founders should look for when working with a lender… Among them is the number of companies they foreclosed on. Any lender who has been around a while will have experienced this for a variety of unavoidable reasons, but some lenders are more willing to do this than others. These are the ones you want to watch out for.”   Just one quote from a great conversation between our founder and CEO David Spreng and Nick Moran on The Full Ratchet podcast.   During the discussion, David shared details on the founding of Runway Growth Capital, the importance of venture investment, and why founders should speak with the CEOs of deals that went south when evaluating a potential lender – not just the ones that worked out as planned.   Check out the link below for the full episode!

We’re excited to partner with CarNow, a live-data automotive technology platform that helps dealers elevate the car-buying experience by transforming the way they connect with customers. This investment will support CarNow's continued market expansion and accelerated product development. 

In this recent piece for Benzinga, our founder and CEO David Spreng shares why many entrepreneurs are now relying on a mix of both venture equity and venture debt to fuel growth.   In the current environment, equity is expensive and many founders are having to give up additional ownership for the same level of capital. Venture debt has become more attractive as it is less dilutive than equity, can be accessed in a much quicker time frame, and helps bolster a company’s valuation.   Check out more below!

We are proud to share that Runway Growth Finance Corp. has announced a new joint venture with Cadma Capital Partners!   Cadma provides asset-backed financing to venture / growth lenders, high-growth companies, and financial sponsors, and is an affiliate of Apollo Global Management, Inc. GlobalManagement. This partnership will enable Runway Growth to expand its presence in the growth lending market and unlock additional capacity to execute on investment opportunities.   The joint venture will be an equal partnership between Runway and Cadma and includes financing capacity of up to $200 million. Runway-Cadma I LLC will focus on financing private and sponsor-backed late- and growth-stage companies.   Check out the link below for more details.

Access to capital can often be the reason why some startups succeed, and others fail.   But founders need to have a full grasp on all of the financing options at their disposal, and in what circumstances they make sense.   Most founders inherently seek equity financing, and for good reason, but venture debt has become increasingly prevalent. As we note in our Founder's Guide below, there are several important use cases. It can:   ✔ Fuel growth by funding sales and marketing efforts, product development, and business expansion. ✔ Extend runway to reach the next milestone. ✔ Prevent the need for a bridge round by providing financing between equity rounds. ✔ Fund a large capital expenditure for new equipment or acquisitions. ✔ Act as an insurance policy to protect against unexpected business challenges or economic downturns. ✔ Help refinance existing lenders who may be unable or unwilling to scale with your business.   These are just a few of the use cases. As for some of the benefits, debt is typically cheaper than equity and allows you to maintain greater control of your business. When used in the right situation, it can be an incredibly powerful tool.   Check out our Founder's Guide to Venture Debt below to learn more.

How has the venture lending landscape changed in the year since SVB’s collapse? Our founder and CEO David Spreng shares some of his thoughts with the Financial Times.   As David notes, it’s critical to understand the bifurcation that has happened – early-stage venture debt and late-stage growth lending have essentially become two different businesses. SVB “specialized in the early-stage market where many larger banks had stayed away because of the risks involved.” A lot of companies would like a part of this business, but nobody has said “we’re going to be the next SVB.”   Check out more in the link below!

We are proud to celebrate #InternationalWomensDay and want to say thank you to all the talented women at our firm, our portfolio companies and the venture ecosystem for challenging and inspiring us each day.

Attending the second annual Venture Debt Conference tomorrow? Be sure to check out the two sessions below!   First, Brad Pritchard will be on a panel discussing “Venture Debt in the Post-SVB Era”. He will be joined by Troy Zander of Barnes & Thornburg, and David Sabow of HSBC. The session will examine the different circumstances that led to the SVB era, the evolving face of venture debt today, and how to navigate the current venture debt market successfully.   Second, Rachel G. will be doing a Q&A on late-stage venture debt with Peter Lorimer of Betterment. The fireside chat titled “A Borrower’s POV: A Look at Late-Stage Venture Debt” will dive into how borrowers can benefit from late-stage venture debt and why choosing the right partner matters. 

We are pleased to publish the results of our third annual Venture Debt Review! As always, we use this as an opportunity to gauge market sentiment on venture debt financing, and how major events are impacting the industry. What were some of the big takeaways this year? For one, debt continues to remain an important source of capital for founders. And the VCs surveyed agree - 88% said their portfolio companies plan to pursue venture debt in the next 12-18 months. Also, the collapse of Silicon Valley Bank last year has influenced the views of both capital seekers and providers. One-third (33%) of entrepreneurs surveyed think venture banks have become less trustworthy since the collapse, and 23% of VCs surveyed agree.   Debt remains such an important source of funding, especially for late-stage and growth companies. While misperceptions will always exist, we’re proud to conduct this annual research and provide clarity on the role that it can play.

We’re excited to partner with Blueshift, a San Francisco-based company that helps brands automate and personalize engagement across every marketing channel, using a unique combination of customer AI and generative AI. Runway’s investment will refinance existing debt and provide additional working capital to expand sales, marketing, and operations of its customer engagement platform.