Venture Debt Program
MDC’s Venture Debt Fund is designed to provide debt financing to emerging growth companies. The debt is structured with repayment forecast from the company’s ability to reach cash-flow breakeven with its existing liquidity or the company’s ability to raise additional equity capital. The Fund is intended to be complementary to early-stage equity sources of capital and stretch the ability of growth companies to access capital at a predictable cost while giving up minimal ownership or control.
The Fund was established in 2004 to fill a gap in financing for early-stage tech companies that create high quality jobs in our region. Since inception, the Fund has provided over $20 million in financing to 55 companies to help create nearly 2,180 jobs in Dane County.
Requirements for Eligible Borrowers:
Borrower must have received capital contributions from angel or other professional sources
Demonstrate a minimum liquidity period of at least six months
Provide evidence of a competent management team
Provide data to support a viable business model and path to profitability
Borrower is expected to create new, quality jobs
Borrower must be in revenue stage to be eligible and demonstrate predictable MRR
Terms:
Loans up to $500,000
Prime + ½% to Prime + 10%, depending on risk
48-month term, fully amortized, with 6 months of interest-only payments
The fund will typically take warrants for up to 25% of the face value of the loan
Origination fee of 1.5 – 2.0%
MDC’s current partners include Bank of Sun Prairie, Capitol Bank, City of Fitchburg, First Business Bank, Madison Gas & Electric, Middleton Area Development Corp, Monona Bank, Oak Bank, One Community Bank, Park Bank, Incredible Bank, Settlers Bank, Starion Bank, and State Bank of Cross Plains.
For information, contact:
Juan Gomez, VP of Lending
608.455.0320
Jillian Hackel, Lending Analyst
608.571.3302
