The Founder's Guide to Venture Debt: 10 Key Funds & When to Actually Raise
The "No-Dilution" Playbook for a Tough Market
Pitching for 20% equity in this market is painful. You have revenue, but your valuation isn't reflecting your potential, and you don't want to dilute. You've heard of venture debt, but you've also heard the horror stories, vicious terms, warrants, and founders losing control.
Here's the truth: 99% of founders raise debt at the wrong time or for the wrong reasons.
Venture debt isn't a "lifeline" when you're dying; it's "jet fuel" when you're already flying. This isn't a textbook. This is an operator's playbook for when to use debt and who to get it from.
The "When-to-Raise-Debt" Framework
The Golden Rule: Never raise debt to find product-market fit. Only raise debt to scale product-market fit.
✅ DO Use Debt For (Scaling):
Use Case (When to Use Debt) | Example / Description |
|---|---|
Working Capital | You have a signed ₹5 Cr purchase order from a big client but need ₹2 Cr to buy the inventory. |
CapEx (Capital Expenditure) | You need to buy ₹3 Cr worth of new servers or factory equipment to meet proven demand. |
Runway Extension (The "Smart Move") | You just raised a ₹20 Cr Series A. You immediately add ₹5 Cr of debt. You just extended your 24-month runway to 30+ months, giving you a huge advantage over competitors without diluting another share. |
❌ DO NOT Use Debt For (Surviving):
Use Case (When NOT to Use Debt) | Example / Description |
|---|---|
Making Payroll | This is the #1 sign of a death spiral. You're just delaying the inevitable. |
Marketing Spend to "Find" Users | You can't pay back a loan with "learnings." |
A "Hail Mary" Pass | If you only have 2 months of cash left, a debt fund won't save you. |
10 Venture Debt List (November 2025)
Fund Name | Key Personnel to Connect | Investment Focus (Stage & Sectors) | Typical Cheque & Term | What They Really Want (The "Goldmine") |
|---|---|---|---|---|
Series A - D | Fintech, Consumer Brands, SaaS | ₹5Cr - ₹150Cr / 12-36 months | They must see a top-tier VC (like Peak XV, Accel) already on the cap table; this is non-negotiable. | ||
Series A+ | Consumer (inventory), Fintech (lending), CleanTech (capex) | ₹15Cr - ₹100Cr+ / 18-30 months | Their "sweet spot" is funding predictable assets (inventory, capex) and recurring revenue, not marketing burn. | ||
Series B - Pre-IPO | EV, AI Infra, FinTech, Consumer (avoids high-risk) | ₹10Cr - ₹100Cr / 24-36 months | Their LPs are insurers, so they must see predictable cash flows and will not fund high-risk "survival" rounds. | ||
Series A - B | Consumer Brands, AI, DeepTech, SaaS | ₹10Cr - ₹80Cr / 24-36 months | Their "kicker" is a 10-15% warrant (equity) coverage, and post-2024, they do deep diligence on corporate governance. | ||
Series A+ (profitability focus) | Health, SaaS, B2B, CleanTech | ₹3Cr - ₹50Cr / 12-36 months | After merging with Caspian Debt (2025), they will fund "bridges to profitability" even without a new equity round. | ||
Series C - Pre-IPO | Sector-agnostic, mature "Crossover" companies | ₹25Cr - ₹150Cr / 36+ months | They are an exit partner; the debt is a bridge to build a relationship to take you public via their IB/PE arms. | ||
Min. ₹85 Lakh ARR | B2B SaaS & AI (with cross-border revenue) | Up to $3.5M (or ~60% of ARR) / 12-month repayment | They are built for the "India-US corridor" and will fund your global ARR (in USD or INR) when others can't underwrite it. | ||
Growth Stage (Profitable) | D2C Consumer Brands, B2B, FinTech | ₹50Cr - ₹60Cr / 24-36 months | They want to get an inside track for their own growth-stage equity funds by backing strong brands with debt first. | ||
Series A+ | Fintech, B2C, B2B, SaaS (with clean data) | ₹20Cr - ₹30Cr / 24-36 months | They are ex-bankers/quants; your pitch must be data-heavy to fit their "AI-powered" underwriting model. | ||
Post-Revenue (Min. ₹5L MRR) | D2C, eCommerce, B2B SaaS | ₹20L - ₹20Cr / 6-18 months | This is RBF, not pure debt. Their "catch" is no equity or warrants; they fund predictable OPEX (marketing/inventory). |
Debt Isn't Scary. Being Unprepared Is.
Venture debt isn't 'good' or 'bad', it's a high-performance tool. Used correctly, it's the cheapest, smartest way to grow. This guide gives you the "when" and "who."
But before you send that first email, you must understand: lenders are 10x more rigorous than VCs. They don't care about your 10-year vision. They care about your last 10 months of revenue and your next 10 months of projections. Your financials cannot be an afterthought. They must be your lead story, organized and ready.
This is why having a tool to track your metrics isn't optional. Before you pitch, you need to know your Fundability Score to see if you even qualify. Then, you need a professional way to manage these new conversations, which you can do for free on startup.backrr.com.
