Venture Debt

Point Financial Inc. knows from experience that for companies at critical stages of development, debt can serve as the right financing option to foster growth with minimal dilution of equity ownership, while accelerating the time to market for competitive advantage.

PFI’s venture debt solutions can be used for working capital, expansion, acquisitions, and deployment of demonstration, pilot, and commercial facilities as a few examples.

We often utilize this process to help our portfolio companies’ extend their equity runway to reach their key value inflection points, without unnecessary dilution or concern for losing majority ownership of their organization.

We allow companies to broaden the scope of clinical development and research, pursue new or secondary programs, acquire or in-license new technology, and prepare for commercialization stage, sales ramp-up, and new hires.

PFI helps its portfolio companies invest in new capabilities to reach important growth milestones and strengthen their balance sheet ahead of an IPO or negotiations with their strategic partners, while complementing equity financing and optimizing capital structure.

Point Financial Inc.’s debt financing is intended to complement equity. By using combinations of appropriate amounts of equity and subordinated debt capital, entrepreneurs, management teams, and equity sponsors can reach important development milestones, providing gain to both sides, without much risk from either party.

Why Use Venture Debt?

Venture debt is typically less dilutive than a new equity round and delivers more from equity dollars by providing the extra time or resources needed to reach key growth milestones. By using venture debt, companies lengthen the time needed between equity rounds, giving entrepreneurial teams time to focus on building the business.

PFI’s venture debt package provides additional negotiating leverage for potentially higher valuation and a more successful subsequent round of financing when key milestones have been met. We help venture capital companies leverage their capital, creating a smart financing solution for both the management team and investors involved.

How Venture Debt Works

Venture debt creates an insurance policy against having to seek new funding at a lower valuation because key milestones have not been achieved. It also provides the extra runway needed to reach key milestones, which in turn makes raising the next round of financing easier and generally boosts valuations. If the company meets the milestones and borrowing turns out to be unnecessary, then paying interest on the loans is significantly less expensive than financing the entire business with equity.