{"id":43800,"date":"2018-11-26T11:27:32","date_gmt":"2018-11-26T09:27:32","guid":{"rendered":"https:\/\/newserver.fyb.de\/produkt\/venture-debt-venture-capital-for-innovative-companies\/"},"modified":"2018-11-26T11:27:32","modified_gmt":"2018-11-26T09:27:32","slug":"venture-debt-risk-capital-for-innovative-companies","status":"publish","type":"product","link":"https:\/\/www.fyb.de\/en\/produkt\/venture-debt-risk-capital-for-innovative-companies\/","title":{"rendered":"Venture debt \u2014 venture capital for innovative companies"},"content":{"rendered":"

Chris\u00adtian Hoppe<\/strong> \u2014 Mana\u00adging Direc\u00adtor of Sili\u00adcon Valley Bank Germany, Frankfurt\/Main<\/p>\n","protected":false},"excerpt":{"rendered":"

While many high-growth, venture capi\u00adtal (VC)-backed compa\u00adnies in the U.S. have been raising debt finan\u00adcing along\u00adside equity rounds for deca\u00addes, the know\u00adledge, use, and asso\u00adcia\u00adted comfort level with venture debt in German compa\u00adnies is very diffe\u00adrent from that in the U.S.<\/strong><\/p>\n

In an envi\u00adron\u00adment where choice in finan\u00adcing is ever-incre\u00adasing, it is important for entre\u00adpre\u00adneurs to make sound forward-looking decis\u00adi\u00adons that posi\u00adtion the busi\u00adness stron\u00adgly. It is not only the total cost of capi\u00adtal that must be conside\u00adred, but also the most effi\u00adci\u00adent mix of debt and equity, scala\u00adbi\u00adlity and suita\u00adbi\u00adlity of the
\ncapi\u00adtal depen\u00adding on the matu\u00adrity of the company.<\/p>\n

Raising venture capi\u00adtal through equity is a common way for many compa\u00adnies to invest further and grow: Venture inves\u00adtors or VCs acquire equity stakes in young, inno\u00adva\u00adtive, unlis\u00adted compa\u00adnies that are charac\u00adte\u00adri\u00adzed by above-average growth poten\u00adtial despite insuf\u00adfi\u00adci\u00adent ongo\u00ading profi\u00adta\u00adbi\u00adlity. But the cost of equity fluc\u00adtua\u00adtes signi\u00adfi\u00adcantly in the busi\u00adness cycles of the inno\u00adva\u00adtion economy. There are always phases when equity is in short supply on the market. But even in better times, it is gene\u00adrally true that debt capi\u00adtal is more cost-effec\u00adtive than equity capi\u00adtal, espe\u00adci\u00adally in the medium and long term.<\/p>\n","protected":false},"featured_media":23816,"comment_status":"open","ping_status":"closed","template":"","meta":{"wp_typography_post_enhancements_disabled":false},"product_brand":[],"product_cat":[2452,2457,2461],"product_tag":[1672,1675,1679,1680,1685,1688,1690,1693,1696],"class_list":{"0":"post-43800","1":"product","2":"type-product","3":"status-publish","4":"has-post-thumbnail","6":"product_cat-ebook-en","7":"product_cat-fyb-2019","8":"product_cat-christian-hoppe-en","9":"product_tag-equity-rounds","10":"product_tag-total-cost-of-capital","11":"product_tag-company-maturity","12":"product_tag-risk-investors","13":"product_tag-cost-of-equity","14":"product_tag-business-cycles","15":"product_tag-innovation-economy","16":"product_tag-christian-hoppe-en","17":"product_tag-silicon-valley-bank-germany-en","18":"pa_ausgabe-deutsch-en","19":"pa_ausgabe-englisch-en","21":"first","22":"outofstock","23":"taxable","24":"shipping-taxable","25":"purchasable","26":"product-type-variable"},"yoast_head":"\nVenture debt - venture capital for innovative companies - FYB Financial Yearbook<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fyb.de\/en\/produkt\/venture-debt-risk-capital-for-innovative-companies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Venture debt - venture capital for innovative companies - FYB Financial Yearbook\" \/>\n<meta property=\"og:description\" content=\"While many high-growth, venture capital (VC)-backed companies in the U.S. have been raising debt financing alongside equity rounds for decades, the knowledge, use, and associated comfort level with venture debt in German companies is very different from that in the U.S. In an environment where choice in financing is ever-increasing, it is important for entrepreneurs to make sound forward-looking decisions that position the business strongly. It is not only the total cost of capital that must be considered, but also the most efficient mix of debt and equity, scalability and suitability of the capital depending on the maturity of the company. Raising venture capital through equity is a common way for many companies to invest further and grow: Venture investors or VCs acquire equity stakes in young, innovative, unlisted companies that are characterized by above-average growth potential despite insufficient ongoing profitability. But the cost of equity fluctuates significantly in the business cycles of the innovation economy. There are always phases when equity is in short supply on the market. 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