Short answer
The best time to raise venture debt is alongside or shortly after an equity round, when investors have just backed the company and the debt can extend runway to the next milestone. Companies are usually ready once they have institutional investors, recurring revenue and a credible path to breakeven. Avoid raising venture debt when cash is nearly gone, before revenue, or to fund a single uncontracted deal.
Key facts
- Best timing: during or within months of an equity round
- Typical readiness: Series A+, recurring revenue, institutional investors
- Allow 6–10 weeks from first call to funds
- Avoid: under six months of runway, pre-revenue
Why lenders prefer you raise alongside equity
A fresh equity round shows investors still back the company and gives the lender a cash cushion. The company also has the most negotiating power then: plenty of runway, a recent valuation and no urgency.
Signs your company is ready
- You have raised from institutional investors with capacity to follow on
- Revenue is recurring or contracted, and growing
- Your forecast shows a path to breakeven or a clear next milestone within the loan's life
- You own valuable technology or IP
- You have at least 12 months of runway before the debt
When to wait
- Before revenue: lenders have nothing to lend against.
- Low on cash: with under six months of runway, debt gets expensive or unavailable, and repayments compound the problem.
- One big bet: debt shouldn't fund a single uncontracted deal that may not happen.
How long does it take?
Usually 6–10 weeks: an intro call, credit review, indicative terms, due diligence and credit committee, then legal documents. Starting early, even before your equity round closes, means the facility is ready when you need it.
Documents to prepare
- Pitch deck
- Monthly management accounts (two to three years if you have them)
- Financial forecast covering the loan term
- Cap table
- Details of investors and latest round
- Recent investor updates
- Access to live accounting software and an open banking connection
Related: Venture Debt →
Related questions
Can I raise venture debt before my Series A?
It is rare. Most venture debt lenders want institutional investors and recurring revenue first.
Should I raise venture debt if my round is delayed?
Only if your runway is still healthy. Debt raised in a cash crunch is expensive and risky.