Arctic Wolf, a 10-year-old cybersecurity startup valued last year at $4.3 billion, is in talks to raise $300 million in convertible debt from investors including direct lender Owl Rock Capital, according to people familiar with the matter.

The debt would convert to shares at a premium to the price in an eventual initial public offering, the people said. Such an arrangement would indicate that the investors are betting the stock will trade even higher after the IPO price. The Eden Prairie, Minn.–based startup is working with Morgan Stanley as part of the deal, which has not closed. Bankers expect more late-stage startups to take on debt as venture investors curtail equity deal-making.