Venture debt is reshaping how capital flows through startup ecosystems worldwide, acting as a crucial bridge between early-stage and late-stage investment rounds.
New research published in the International Review of Economics and Finance by academics at Edinburgh Business School, Heriot-Watt University, is the first to compare venture debt’s influence on equity funding across multiple countries. Analysing data from 59 nations between 2015 and 2024, the authors found that greater venture debt availability is linked to lower early-stage equity investment, significantly higher late-stage equity funding, and an overall increase in the total pool of capital available to startups.
For every unit of venture debt…