Venture Lending, Working Capital and Term Loans for Emerging Companies: Borrower and Lender Perspectives

Negotiating Loan Terms, Collateral Requirements, Warrants, Revenue, Liquidity and Non-Financial Covenants, and More

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, April 10, 2014

Recorded event now available

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Course Materials

This CLE course will discuss debt financing traditionally available to emerging companies—bank and non-bank term loans, working capital facilities and equipment financing. The program will analyze current market loan terms and conditions, borrower negotiation of the term sheet, and lender due diligence practices.

Description

Demand by emerging companies for venture debt financing has greatly expanded and continues to grow. Emerging company debt consists of bank term loans, working capital facilities and term loans provided by non-bank lenders. Venture leasing finances capital equipment expenditures.

VC-backed companies must consider the pros and cons of debt financing and the optimal timing for various forms of debt financing. Needs and concerns for start-up companies are different than companies in the growth phase of the business.

Current market financing terms and conditions vary among the different debt facilities, including terms such as repayment, interest rates, collateral requirements, warrant coverage, and financial and operational covenants. Careful negotiation of the terms will avoid surprises for borrowers.

Listen as our authoritative panel of finance practitioners discusses debt financing for emerging companies, bank and non-bank term loans, working capital facilities, and equipment financing. The program will discuss market finance terms and conditions, issues that should be considered by the borrower at the time the term sheet is being negotiated, and best practices for lender due diligence.

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Outline

  1. Venture debt financing vs. equity financing—comparisons, pros and cons
  2. Bank term loans
  3. Working capital facilities
  4. Venture term loans
  5. Negotiating the term sheet for borrowers
  6. Due diligence for lenders

Benefits

The panel will review these and other key questions:

  • What types of covenants are typically being required or negotiated in the different types of debt financing facilities?
  • What advantages does venture debt financing provide for emerging companies?
  • What drawbacks does venture debt financing present for operations and board decision making?
  • What are best practices for emerging companies in negotiating the term sheet with the lender?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Dolph Hellman
Dolph Hellman
Partner
Orrick Herrington & Sutcliffe

Mr. Hellman is the Co-Chair of the firm's Private Investment Funds Group. He concentrates his practice on private...  |  Read More

Russell D. Pollock
Russell D. Pollock
Partner
Greene Radovsky Maloney Share & Hennigh

Mr. Pollock provides legal counsel in a broad range of commercial finance and general business transactions, with...  |  Read More

Haim Zaltzman
Haim Zaltzman
Partner
Latham & Watkins

Mr. Zaltzman’s practice focuses primarily on emerging company debt transactions. He has closed over US$2.5...  |  Read More

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