Venture Debt investors provide debt to early stage companies, usually in technology or biotechnology. This debt has a maturity date it upon which it must be repaid. It often carries both a fixed rate of interest and warrants (options converting into a portion of equity).
Debt investors provide a loan (or bond) for a certain period of time, at a given rate of interest. The money must be repaid at the end of the period, unlike equity, which usually has no maturity date. Debt must be repaid before equity. In some cases, a company will have multiple classes of debt. Senior debt refers to debt that ranks ahead of other classes of debt. Mezzanine or second lien ranks in between debt and equity.
Structured Capital investors provide capital that has characteristics in between senior debt and equity. Examples include debt plus warrants (similar to equity options), mezzanine debt (higher return, higher risk debt that is repaid after senior debt but before equity), and convertible notes (although for our purposes, notes that are automatically converted to equity are considered to be equity). Like senior debt, these structured instruments have a fixed maturity, some portion of fixed interest (although the interest may be accrued instead of paid in cash), and must be repaid in priority to equity holders in a sale or liquidation.
Special Situations means investors that look for companies requiring an operational turnaround, that have capital structure issues, or other situations that ordinary investors would find challenging. Turnaround / special situations investors are usually very flexible and look for returns through both debt and equity structures
If you want to search all types of debt capital in the The United States region you can skip the above step and get going with our investor search tool below. Alternatively, see our sections on raising equity capital or selling your business.