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 recovering and late-stage valuations stabilizing, companies that optimize their financial runway will be best positioned to scale efficiently and secure future funding on favorable terms. This is where we are seeing venture debt playing a crucial role—not as a last resort, but as a smart financing tool that gives founders more control over their trajectory.
Why Timing Matters More Than Ever
For many startups, the gap between fundraising rounds is widening, according to the PitchBook data. In the years following the peak of the venture boom, investors have become more selective, and deals are taking longer to close. Raising funds in a down market is something founders would rather avoid, so startups need to find ways to maintain momentum while waiting for the right market conditions to raise their next round.
Raising too soon—especially in a period of compressed valuations—can lead to excessive dilution and limit a founder’s ability to maximize long-term value. But waiting too long without sufficient capital can mean missing key milestones, slowing growth, or losing competitive advantage.
This is where venture debt can serve as a strategic bridge, giving startups the financial flexibility to hit key targets, strengthen their valuation, and approach equity markets from a position of strength.
How Venture Debt Helps Founders Stay in Control
Here’s how startups are leveraging venture debt to stay ahead in today’s market:
1. Extending Runway Without Dilution: For startups that are approaching key milestones—whether it’s product development, customer acquisition, or revenue benchmarks—venture debt offers a way to keep operations moving without the immediate need for a dilutive equity raise.
Many founders use venture debt to buy time, ensuring they can reach a higher valuation before their next funding round. This means negotiating from a position of strength, rather than being forced to accept lower terms due to cash constraints.
2. Investing in Growth at the Right Moment: Over the past 25 years we’ve been in venture debt, we’ve seen time and again that startups don’t grow in a straight line. Some opportunities require immediate investment, whether it’s scaling a sales team, launching in a new market, making a critical hire or investing in specialist equipment or technology.
Venture debt allows companies to act on these opportunities without waiting for the next equity round. This agility is especially important in competitive markets, where timing can determine whether a company gains or loses market share.
3. Strengthening Financial Positioning for Future Raises: For startups planning a Series B or C, venture debt can be used to optimize financial health ahead of a funding round. By using debt capital to support operations, companies can demonstrate stronger revenue growth, improved margins, and greater capital efficiency—all factors that increase investor confidence and lead to better fundraising outcomes.
Instead of relying purely on equity to finance expansion, we are seeing many venture-backed startups balancing their capital stack with debt to create a more sustainable financial model.
Where Venture Debt is Making the Biggest Impact
Venture debt is playing a key role in helping companies across high-growth, capital-intensive industries scale efficiently. Some of the most impactful applications include:
- Space Technology – Companies like Stoke Space and Astranis are leveraging venture debt to fund critical R&D, infrastructure, and expansion. Stoke Space is advancing fully reusable rocket systems, while Astranis is deploying next-generation broadband satellites to improve global connectivity.
- Clean Energy and Sustainability – Startups such as SolarCycle and Terabase Energy are using venture debt to accelerate solar infrastructure and recycling solutions, ensuring sustainable energy remains at the forefront of innovation.
- Advanced Materials and Manufacturing – Companies like MycoWorks, which develops sustainable biomaterials, and LuxWall, which specializes in energy-efficient glass, are securing funding to scale production and meet increasing demand.
- Biotech and Life Sciences – Nobell Foods and Outpace Bio are applying venture debt to fund scientific development, commercialization, and market expansion in food technology and biotech.
- Transportation and Mobility – Companies like Harbinger Motors, a leader in electric commercial vehicle technology, are using venture debt to expand manufacturing capacity and accelerate deployment.
Across these industries, venture debt isn’t just providing capital, it’s enabling companies to move faster, strengthen their financial position, and scale with confidence.
A Smarter Approach to Startup Financing
At ATEL Ventures, we work with founders to design flexible, customized venture debt solutions that align with their business goals. We believe venture debt should empower startups, providing financial runway without unnecessary restrictions or dilution.
For startups navigating today’s venture landscape, the right financing strategy is about more than just raising money—it’s about timing, control, and long-term value creation. Venture debt offers a way to achieve all three.