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Spinta Bytes Blog

Venture Debt Leverage Multiples

Mid / Later Stage Venture Companies

 

Leverage multiples for middle market companies are well understood, but how much debt is available to a later stage venture business that is not yet profitable? Based on data from ~25 recent venture debt financings, a clear picture emerges on the drivers of 'maximum debt' as a function of revenue run rate.



Yes...scale, investor reputation, growth, latest equity round all matter. But by far the most important factors are:

  • Stickiness of customer base (ie revenue retention)

  • Gross profit margin

Of course comments are always welcome.






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