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.
Requirements for Eligible Borrowers:
- Businesses must be located in Dane County, and
- Businesses are expected to create new, quality jobs for Dane County residents, and
- The Fund is targeted to companies that have reached the revenue stage but are still negatively cash flowing. The fund is designed to provide these companies with the liquidity needed to reach cash flow breakeven and beyond.
The Venture Debt Fund provides loans at rates from Prime + 3% to Prime + 8%, depending on risk. The fund will also take warrants or conversion rights for a percentage of the face value of the loans to compensate for risk.
These terms provide flexible and predictable costs of capital to early stage growth companies, without giving up significant dilution of equity or control.
MDC and our participating partners will provide over $5million dollars for emerging growth companies in Dane County through the fund.
MDC's partners in the fund include MGE Energy, Johnson Bank, Anchor Bank, Associated Bank, State Bank of Cross Plains, Capitol Bank, Middleton Community Bank, Oak Bank, M & I Bank, First Business Bank, Settlers Bank, Town Bank, Starion Bank, Middleton Area Development Corporation and the City of Fitchburg, and a start up grant from Bank One.