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European founders, often operating with more constrained funding options and fewer mega-rounds, have adapted by being more strategic. They understand that equity is expensive—and not always the right tool for every job. Venture debt is used proactively: to extend runway, bridge to milestones, or fund large capital expenditures (like equipment or infrastructure) that equity investors may hesitate to back. In contrast, many U.S. startups still regard venture debt as a signal of weakness—a stopgap measure when equity financing falls through. That perception, while slowly evolving, continues to limit how founders think about capital strategy. Even as equity rounds take longer to close and valuations compress, some U.S. founders avoid debt entirely, leaving valuable financing options on the table.

Founders looking to raise in this market need to understand what investors are prioritizing—and how they can build financing strategies that reflect this new reality. One of the most overlooked tools in that toolkit? Venture debt.

According to the recent PitchBook-NVCA Venture Monitor, the median time between venture rounds is increasing, meaning startups need to be more strategic about how they manage capital. For many founders, timing has never been more critical. With IPO markets still...