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Gold Hill Ventures Case Study

Gold Hill Ventures Case Study - Ryan Guerrettaz Gold Hill...

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Ryan Guerrettaz Gold Hill Ventures Case Venture Debt Taking venture debt can be good for a company if they don’t want to give away a share of the company. If a company wants to lease equipment rather than owning it, venture debt is also a good option. Another good thing about venture debt can be the terms of repayment. According to the reading, venture debt is usually repaid over 36 months or more giving the company plenty of time to raise more capital or revenue. Venture debt also brings a low interest rate compared to required return of investors that usually require a large portion of ownership in the company leading to losses in capital in the long-term. This is very good for a start-up if they are projecting a large growth rate over the next few years. Separate Fund – Gold Hill Fischer and his colleagues are raising a separate fund from SVB for a few reasons. For one, partnering with SVB creates a great amount of synergy as the two could feed off of each other’s clients as well as share deals together. Also SVB is looking for a partner fund that would cover venture debt deals: something that SVB had looked into offering for a long time but never had done. Given the large amount of deals that SVB does they are forced to syndicate many of the deals with other firms. In order to increase their profits off these deals SVB decided it would be advantageous for them to syndicate with a friendly fund, Gold Hill. Investing in Gold Hill and sharing in the profits that Gold Hill
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