WOODSIDE, California, January 25, 2022 Runway Growth Capital LLC (“Runway”), a leading provider of growth loans to both venture and non-venture backed companies seeking an alternative to raising equity, today announced the findings from its second annual Runway Venture Debt Review. Produced in partnership with research consultancy, 150 Bond, the survey seeks to gauge the current market sentiment for venture debt among capital seekers and capital providers.

There is a synergy emerging between venture equity and venture debt. Eighty-two percent of entrepreneurs surveyed believe that the abundance of venture equity capital has increased demand for venture debt, while 94% of VCs are becoming more comfortable with venture debt across their portfolio companies.

Other Key Findings Include:

  • On a scale of one to ten (ten being the highest), entrepreneurs rated their experience with venture debt an average of 8.5 (up from an average of 8.0 in 2020), with nearly half of those surveyed rating their experience as a ten.
  • Entrepreneurs feel that venture debt is becoming more founder-friendly (80%), with more transparent pricing and terms in the past twelve months (83%).
  • Late- and growth-stage entrepreneurs tend to prefer non-bank / specialty finance lenders because these lenders often offer larger loan amounts and more flexible structures than banks.
  • Many early-stage companies regard the cost of capital as “the top factor” when choosing a lender.
  • Over half (55%) of entrepreneurs who have not used venture debt before do not see the value proposition, going as far as to indicate that they (38%) feel taking debt is perceived negatively.

The venture debt market is evolving and becoming more nuanced, meaning that to fully appreciate its fine-point distinctions requires an understanding of its unique characteristics and benefits. For example, according to the survey, lenders are playing a bigger role in supporting borrowers, when historically these loans have been seen purely as growth capital. 

Of the entrepreneurs surveyed, 82% believe lenders can provide value beyond capital, whether that is facilitating additional financing and making introductions to their network or using analytics and providing vertical expertise to help companies stay on plan and achieve better financial results. Borrowers increasingly covet partners who have proven they have the resources and a steady hand (they will not flee at the first sign of trouble) when working with their portfolio companies.

Among founders who have used venture debt, most (67%) opted for venture banks as their debt provider, citing better rates as the main reason. In contrast, some late- and growth-stage entrepreneurs are expressing a preference for non-bank / specialty finance lenders with a reputation for standing by their borrowers. While these types of lenders generally come at a premium, they often offer larger loan amounts and more flexible structures than banks, making them an attractive option for late- and growth-stage companies.

“In our inaugural study we learned that entrepreneurs who have used venture debt have had an overwhelmingly positive experience. While the world has changed a great deal in the past year, the positive sentiment that entrepreneurs have for venture debt remains,” said David Spreng, Founder, CEO and CIO of Runway Growth Capital. “Even with a plentiful supply of equity capital, venture debt continues to gain traction and evolve to support the more value-added needs for entrepreneurs. In turn, the education that is needed to effectively benefit from debt financing remains a challenge and some negative misconceptions of the asset class still linger; this is largely among those who have never used venture debt.”

These misperceptions not only hamper the growth of the venture debt market but could also lead to costly long-term consequences for entrepreneurs who may be giving up too much equity.

“Without guidance from their VC sponsor or a strong working knowledge of how best to utilize debt, less experienced borrowers could easily be overwhelmed by their options and simply default to the lender with the lowest rates,” said Spreng. “However, we are seeing growth among borrowers who are increasingly looking beyond interest rates to favor debt providers with demonstrated industry expertise, a reputation for patience and stability, and the ability with grow with the borrower,” Spreng continued.

When asked to name the “top three main reasons for choosing their lender,” roughly a third of entrepreneur respondents considered lender reputation (35%), industry knowledge (34%), and lender relationships / network (30%) as part of their top three primary considerations when selecting a lender. That said, cost of capital (71%), availability / amount of capital (55%), and flexibility of deploying capital / drawdown times (55%) are still cornerstones for why entrepreneurs seek debt.

Definition of Venture Debt

Venture debt is the issuance of term loans to pre-profit venture-backed and non-venture-backed companies seeking an alternative to raising equity. Unlike traditional bank lending, venture debt is available to companies without positive cash flows or significant assets as collateral. Venture debt accounts for roughly 15% of total venture investment yearly. For further reference, please visit Bloomberg: Meet Venture Capital’s Baby Cousin, Venture Debt.


The Runway Venture Debt Review surveyed 400 U.S. based entrepreneurs who have taken both early- to late-stage venture funding across technology, life sciences, and consumer sectors, along with 100 venture funding providers within the venture capital, venture lending, and commercial banking communities. Additionally, 10 interviews were conducted with executives in the venture space to gain qualitative insights to complement the quantitative findings. The margin of error for the entrepreneurs is 5% and the margin of error for the venture providers is 9%. The full report can be viewed at

About Runway Growth Capital LLC

Runway Growth Capital LLC is the investment advisor to investment funds, including Runway Growth Finance Corp. (Nasdaq: RWAY), a business development company, and Runway Growth Finance LP, which are lenders of growth capital to companies seeking an alternative to raising equity. Led by industry veteran David Spreng, these funds provide senior term loans of $10 million to $75 million to fast-growing companies based in the United States and Canada. For more information on Runway Growth Capital LLC and its platform, please visit our website at

Forward-Looking Statements

Statements included herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition, or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Runway Growth’s filings with the Securities and Exchange Commission. Runway Growth undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

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