Sign up to receive 5 free days of our daily summary for tech news.

Special Offer: Try out The Information today for only $10/month for your first 3 months. 
Venture Capital Startups Google

Venture Debt Boom Belies Risks

Venture capital funding rounds may tend to get all the attention, but debt financing for technology startups is on the rise again—at least for now.

Web survey company SurveyMonkey, hardware maker Jawbone, marketplace Etsy and mobile social network Foursquare have recently chosen to borrow hundreds of millions of dollars collectively in later rounds of financing. Bankers say more early and mid-stage companies are raising debt, too, as entrepreneurs seek fresh funds without giving up equity.

But there are signs that the debt trend could be nearing a peak as more lenders enter the space. Increased competition is likely to drive down returns and lower interest rates. That could make lending money to tech startups less attractive, bankers say. And as rates fall, more companies will seek debt, adding to the risk that firms will loan money to companies that can’t repay.

What Is The Information?

Notes bb3aa5069205d702dda37fc71dc6f1c59df2310c4379304e9f1199f052af4884

Exclusive Articles

We broke it first. Receive original reporting you won't read anywhere else from the largest newsroom in tech.

Notebook b5103017ee163370a1667c9ce59ab0ef023875a17888105d26c185cadf31bb69

Daily news analysis

Every weeknight, we'll send you our reporters’ views on the day’s top tech news—distilled into one email.

Conference calls c9e664e8b96ee347d3e92b8309938f268422b9db98cfabca5c826fbb75054b23

Conference calls

Get access to our reporters and other top executives with monthly deep-dive calls into topics like startups and autonomous vehicles.

Events 499acedd16cffc41445edd76bfd302b2836c2a27419890f17130a6b10e2aa3df

Special Events

For no extra fee, get access to more than a dozen events yearly, from intimate dinners to larger gatherings with marquee speakers.

What else is included in my subscription?

Become a contributor

Share your views and find other subscribers by completing your profile. You’ll be listed in our contributor directory.

Slack community

Discuss topics and current events with our subscriber-only Slack group and share news about your company with other subscribers.

Annual Subscriber only benefits:

Org Charts

Access the only collection of tech company org charts. Our expanding database includes companies like Amazon, Snap, and Uber.

Crypto Newsletter

Our experts investigate the latest in the crypto world to keep you in-the-know about the movements of digital currencies.

Stay up to date on Silicon Valley

Sign up for Jessica Lessin’s (The Information’s CEO & Founder) free Saturday newsletter and also receive a complimentary week of our daily afternoon tech commentary email.

Already a subscriber? Log in here

Recent Articles

Enterprise Amazon Cloud

Big Customers Pressure AWS to Step Up Open Source Support

By Kevin McLaughlin and Amir Efrati

Enterprise Apple AI

Apple’s Former Siri Boss Joins Microsoft AI Group

By Aaron Tilley

Google Facebook Policy

Tech Antitrust Battle to Test Agencies’ Leverage

By Christopher Stern and Ashley Gold


Growing Pains: Facebook Pushes Instagram to Earn Its Keep

By Alex Heath

“2013 was phenomenal for lending and we feel good about 2014, but beyond that we’re cognizant of the exuberance,” says Jacob Moseley, Silicon Valley Bank.