Venture capital investment usual carries higher interest rates...

Venture capital investment usual carries higher interest rates than traditional bank lenders.

Found this article on OneVentures.
https://www.smartcompany.com.au/startupsmart/advice/oneventures-80-million-fund/

Speaking to SmartCompany, OneVentures managing partner Dr Michelle Deaker says the team is looking for startups that are already generating revenues of more than $3 million in recurring revenues, and those that have a solid investor base.

For these companies, the venture credit, or venture debt, funding approach can prove a more attractive option than venture or equity capital funding, she says. It serves to give startups a cash injection, while also offering them the opportunity to keep hold of more equity in their business.That’s becoming particularly pertinent in the COVID-19 environment, Deaker explains.

“Some companies might have found that their growth has slowed during COVID, or it’s been harder for them to do business development,” she says.“It doesn’t mean the business is necessarily not a good business, it’s just finding it a bit harder in this market,” she adds.

“Taking some venture credit gives them a longer runway to get their business going again and go out and raise capital at a later point.“Maybe that use-case has become more obvious to people now, and we’re seeing a lot more enquiries around that.”

There are also opportunities in certain sectors, post-pandemic, Deaker says.The fund is always looking out for high-growth technology companies anyway, but in areas such as collaboration tech, telehealth and use of AI in healthcare, she’s anticipating seeing an uptick in engagement that likely wouldn’t have happened if it wasn’t for the crisis.