Daily News: November 8, 2013

NXT Capital Launches Venture Debt Index


NXT Capital’s Venture Finance Group announced the release of the inaugural edition of the NXT Capital Venture Debt Index. This first-of-its-kind analysis focuses exclusively on venture debt financings between Q1 2012 and Q2 2013. The Venture Debt Index reveals the important and growing impact of non-bank debt on venture-backed companies and markets.

Among other findings, the NXT Capital Venture Debt Index confirms that venture debt is an increasingly popular source of alternative financing for later-stage companies seeking growth capital. Among other findings, the NXT Capital Venture Debt Index confirms that venture debt is an increasingly popular source of alternative financing for later-stage companies seeking growth capital.

Key findings of the NXT Capital Venture Debt Index™ include:

Notable and Steady Capital Investment: With nearly $3.1 billion of venture debt deployed over the last six quarters, the Index confirms that venture debt averages 8% of all capital flowing into venture-backed companies.

Important Source of Growth Capital: The index reveals that debt financing is an essential source of growth capital for companies late in their investment cycle. Since 2012, companies that have been in operation for five to eight years account for 33% of deployed venture debt dollars. For these and other growth-stage companies, venture debt complements or replaces the need for equity.

Geographic Diversity: Venture debt financings have a much broader geographic distribution than venture capital investments. While 52% of all venture capital dollars are invested in the state of California, only 35% of venture debt transactions in the Index were with companies based in that state.

To read the entire NXT Capital press release, click here.