Venture Debt Lenders: What to Consider (And What Are Better Alternatives)

If you're looking for venture debt lenders to finance your business growth, you probably want an alternative to venture capital and debt financing that offers: 

  • A more affordable way than venture capital to extend your runway, invest in growth or cover payroll.
  • Capital without the high risk of equity dilution that’s common with investor funding. 
  • Insurance that acts like a bridge between equity rounds.
  • A way to avoid lowering your valuation through flat or down rounds.
  • A boost of cash to take you from growth to breakeven or profitability. 
  • Financing when you don’t have assets or you aren’t yet generating revenue, both necessary with debt funding. 

However, venture debt may not be the best fit for every company looking to scale. You may want to consider the drawbacks of venture debt and examine a better alternative to debt funding like Jeeves – an inclusive digital debt provider that offers fast multi-currency funding to both VC-funded startups and scale-ups and high-growth companies.

In this article, we'll cover:

Struggling to find the right venture debt lender that suits your business needs? Apply in 5 minutes and get an answer in 48 hours with an alternative to venture debt lenders like Jeeves

10 top venture debt firms

Here are 10 of the top venture debt firms (there is no particular order or ranking to this list):

  1. Trinity Capital
  2. European Investment bank
  3. Silicon Valley Bank.
  4. Bootstrap Europe
  5. Global Growth Capital.
  6. Colombia Lake Partners.
  7. Viola Credit
  8. Bridge Bank
  9. Flashpoint
  10. Hercules Capital

What are the problems with venture debt?

While venture debt may seem like a great alternative to venture capital, it also has limitations that may hinder your business goals and growth. 

For example, consider the following:

  • Venture debt is set up for larger venture-backed companies. Most won’t consider SMEs looking for shorter-term loans or smaller amounts of financing. Like venture capitalists, they’ll be looking for high-growth unicorn potential.
  • Venture debt lenders ask for personal guarantees, covenants and warrants, so you're still subject to partial dilution and restrictions on how you use or access funds.
  • Venture debt lenders don’t have clear eligibility standards. Many niche down to specific industries like SaaS and fintech and won’t consider any businesses outside those fields. 
  • The support you receive is limited and slow. Venture debt lenders may not always provide the same advisory support of private investors or the response speed you need as digital debt lenders do. 
  • Venture debt firms are just as exclusive as venture capitalists and equity investors. They often act like a private club available to a select few, basing their acceptance on gender and cultural norms. 
  • Most venture debt lenders won’t provide financing in multi-currency, meaning you’ll pay a lot in currency hedging costs if you need anything other than USD or GBP.
  • The process of pitching and waiting for a venture debt lender’s financing outcome can take weeks, often just as long as venture capitalists. Be prepared to present the same financial documents as you would to private investors. If you need money quickly, venture debt may not be the answer. 

If you’re looking for a more flexible answer to financing and want fast, clear guidelines, consider a digital debt financing company like Jeeves

What makes Jeeves a great alternative to venture debt lenders?

A digital debt provider like Jeeves makes a great alternative to a venture debt lender because we provide all the same benefits with fewer restrictions. For example, you can raise money without diluting your shares or worrying about covenants or warrants.

As founders, we already have experience funding our own startups. We created Jeeves Capital to solve the financing problems most entrepreneurs face with traditional debt, venture debt and venture capital, like:

  • Struggling to afford the high cost of venture debt and equity capital.
  • Losing control of your company through equity dilution.
  • Investing time in raising equity rounds when you could be building your business.
  • Waiting weeks and months before you know if your fundraising is successful.
  • Dealing with the restrictions of venture capital, venture debt, and traditional debt. 
  • Risking your business and personal assets if you default on debt repayments.
  • Overspending on FX and hedging fees when you require funds in multiple currencies.
  • Discovering the venture capital world isn’t as inclusive or diverse as it seems. 

Jeeves Capital provides two solutions to companies looking for fast liquidity: Jeeves Growth Capital and Jeeves Working Capital. Whereas many venture debt lenders may only offer one financing option, Jeeves understands that every business has different needs based on its current financial situation and growth stage. 

For example, with Jeeves Growth Capital you can: 

  • Extend your startup runway to its next valuation with 12-month revenue-based financing. 
  • Scale your business in between fundraising rounds to get to your next milestone. 
  • Have the security of fixed monthly repayments.

And Jeeves Working Capital provides:

  • A short-term line of business credit that Jeeves clients can use for operational expenses.
  • The security of positive cash flows when you have last-minute or short-term opportunities, like seasonal inventory or discounted supplies or materials.
  • Competitive monthly interest rates with a bullet payment at the end.
Jeeves Capital overview
Jeeves Capital Overview

Let’s look at the main benefits of using Jeeves Capital as an alternative to venture debt lenders:

Know if you're eligible right away with Jeeves’ clear process

We decided to make our eligibility standards as straightforward as possible to save you time when applying for Jeeves debt financing.

Instead of focusing on what niche a business is in, we focus on the company's financials to determine eligibility. The two types of businesses that can qualify for Jeeves Capital are:

  1. Venture-backed businesses with funding from accredited investors, consistent revenue growth and a minimum of 9 months of cash runway.
  2. Scaling businesses with 12 months of revenue history and consistent revenue growth that are breakeven or profitable.

Venture debt lenders are often niche specific or only cater to a particular industry whereas Jeeves works with all industries. Jeeves is available to venture and private equity-backed startups, high-growth firms, or scaling businesses whether they’re early-stage or mature SMEs.

And where most venture debt lenders will need you to be VC-backed, we accommodate bootstrapped companies, too.

Apply in 5 minutes and receive a response within 24 hours

Applying for debt financing through Jeeves Capital over venture debt lenders will save you weeks of a lengthy due diligence process.

Once you know you’re eligible, it only takes 5 minutes to complete a Jeeves application form.

There is no need to pitch us. Instead, we’ll simply check your company financials when you connect your accounting and banking software to our platform, where we can analyse the data and decide from there.

You’ll receive a response within 24 hours, saving you a lot of time and effort compared to applying to venture debt lenders. We can disperse the cash directly to your bank account either on the same day or within 3-7 days.

Jeeves application
Sign up to Jeeves Today

Access financing that’s inclusive of gender and culture

A study by PitchBook shows that, of all the venture capital dollars given out in the US in 2021, only 2% went to female founders. As a large proportion of venture debt gets referred through venture capital firms, it’s safe to say the same disparity also exists with venture debt providers.

With Jeeves, your gender, identity, or culture doesn’t matter to us for our application process, as all should feel welcome. We have funded female-founded companies since our creation, with the most recent being the female-led Beek

We don’t ask any gender-based questions. We only want to know if your business has healthy financials and that you’re in a position to pay us back.

Get a multi-currency loan, without the fees associated with venture debt lenders

Having multi-currency as an option is valuable for international companies with offices in multiple countries or that are about to scale globally.

Jeeves can fund you in up to 7 different currencies, including GBP, USD, CAD, MXN, COP, CLP and BRL, with more coming soon. In addition, we can wire you the money in the currency of your choice straight to your bank account, so you can avoid foreign transaction fees altogether

Retain more control of your business and have fewer restrictions

One of the most significant differences between sourcing finance from Jeeves Capital versus venture debt lenders, venture capital investors or traditional bank loans is that you will have fewer restrictions and requirements to follow. We care more about supporting you in doing what’s best for your company.

The main restrictions you will avoid with Jeeves compared to venture debt lenders are:

  • No governance. No reporting is required with us, so you’ll have more freedom to use the money as you see fit.
  • No personal guarantees. You won’t have to worry about losing personal assets.
  • No warrants. No risk of company dilution.
  • No covenants. We agree to a deal at the beginning and stick to it, providing ultimate flexibility to you. 
  • No hidden fees. With Jeeves, we’re fully transparent in our cost of capital and never have any hidden fees. In addition, we work from fixed monthly payments, so you’ll know precisely what’s due each month.

In terms of payment structure, venture debt lenders are the senior secured lenders, meaning they’re always paid first. However, Jeeves offers more flexibility with its payment structure and has junior options available, so it’s not always top of your debt stack. 

Get dedicated support to help you grow over time

When choosing a venture debt lender, knowing the level of support you will receive can be challenging. It’s not the same as investors in venture lending firms, with whom you can form a relationship and who can act as advisors on your company’s board. 

At Jeeves, we provide a personal account manager to assist you along the financing process. They’re there to support you with any debt financing questions and provide quick answers.  

Our customers also view us as partners instead of just capital providers like venture debt firms. We often get recurring business where a client receives multiple stages of capital from us. As we view your account based on your financials, it's in our best interest for you to grow so you can pay these loans off successfully.

The benefit of growing a relationship with Jeeves over time is we can use your repayment history to qualify you for further funding. For example, with:

  • Jeeves Growth Capital, we can scale up your initial amount over time.
  • Jeeves Working Capital, we can offer rolling renewals to your contract.

You’ll get more than just debt financing with Jeeves 

Jeeves spend management platform
Jeeves spend management platform

We know it takes much more than just capital to create a high-growth business. Therefore, we designed a full financial stack for business growth with additional features such as:

  • Jeeves Credit. A free line of credit in your chosen currency, connected to an expense management platform and an unlimited supply of free physical and virtual business credit cards. These business credit cards help track employee business expenditures and you can stay within budget with individual card spending limits. The credit is ideal for purchasing anything from ads or inventory to business trips and travel expenses.
  • Cashback on all spending. As one of the best cash-back business credit cards, you receive an added sign-up bonus with Jeeves Credit. You can get 2% cash back on all purchases for the first 90 days, up to 1% cashback on all spend thereafter, and 1.5% cashback on all spend with special merchants (Google, Amazon, Meta).
  • Expense management software. A free platform that links seamlessly to Jeeves Credit and to your Jeeves business credit cards. You can track, manage and organise your entire business expenses across offices from one portal, saving you time through. Ideal for managing global expenses, remote employee spending, and recurring subscriptions and ad spend.
  • Perks & Benefits. Jeeves has partnered with 22 top brands, such as AWS, Slack, Notion, and HubSpot, to help you save money through discounts. As a Jeeves cardholder, you can also travel in style with free access to 1,300 airport lounges worldwide. 
Nine of the 22+ Jeeves partners offering rewards for over $100,000 in savings
Nine of the 22+ Jeeves partners offering rewards for over $100,000 in savings

When to use Jeeves Capital over venture debt lenders

You can use Jeeves as non-dilutive capital to grow your business without restrictions no matter your industry.  

Most venture debt deals have traditionally been with more prominent silicon valley type startups and venture debt firms won’t always work with smaller companies. Venture debt providers are often “unicorn” hunting and leave small profitable companies behind. They’ll also be partial to venture-backed industries like fintech and SaaS. 

Jeeves fills this gap. We’re happy to work with businesses in any industry and with smaller companies and startups like 1440, a business that wasn’t eligible for venture capital financing despite experiencing rapid growth. 

However, 1440 did meet our financial criteria and grew 300% by using Jeeves Capital to scale their social media marketing, which increased their subscriber base. The team at 1440 also report that along with Jeeves Capital, they use the full suite of Jeeves products to help run their fast-growing business, from managing expenses on our software to tracking employee spending via business credit cards. 

You can also use Jeeves Capital for mergers and acquisitions, which can help you raise your next round of equity more easily. Take Beek, a Latin American company that couldn’t find the financing to acquire an AI platform, although it already had recurring revenue. They had almost secured funding at one stage but couldn’t get it in their currency of choice.

Jeeves helped realise the vision of Beek’s female founder by providing capital in their preferred currency when they needed it. This led to them acquiring the business, which enabled them to subsequently negotiate far better VC terms at their next equity financing round. 

When it makes sense to use venture debt instead of Jeeves

Jeeves might not be suitable for a company still in its seed stage. We require your company's financials to be healthy and for your company to show consistent revenue growth. So some companies might not have enough of a track record. 

Even if you’re VC-backed, we’ll still look for a minimum of 9-months of runway. If not VC-backed, we’ll want to see you’re breakeven or profitable or have a clear path to profitability. Venture debt financing might be more suitable if you don’t meet these criteria. 

It might not suit you to get Jeeves Capital if you’re looking for a longer-term loan. We offer a maximum of 12 months with Jeeves Growth Capital, but we can scale you up after this. On the other hand, venture debt lenders will provide loans anywhere from 12 to 48 months, with the standard being 36 months. 

Jeeves will usually cap a loan at $2 million, which can suit some high-growth companies and most SMEs. However, venture debt lenders can provide far higher amounts that might be more suitable for larger enterprises looking for substantial funding. 

Jeeves: A faster and more affordable alternative to venture debt

We hope this article has shown you Jeeves as an alternative to venture debt lenders that you can use to propel your business to the next level with low-risk, time-efficient and inclusive financing.

Jeeves is much more than a financing option like venture debt. Integrating our full-stack financial software can improve multiple areas of your business, like expense overview and budget management.

We provide all the tools you need to manage your financial needs in one place, meaning less time spent searching and integrating other apps and more time spent surpassing your competitors. 

Interested in seeing if Jeeves is the perfect alternative to venture debt for you? Try Jeeves.

https://pitchbook.com/news/articles/female-founders-dashboard-2021-vc-funding-wrap-up