Investors | PaceZero Capital

Structured exposure to the digitization

& decarbonization of the economy for

purpose driven returns.

Venture Debt Investing

Secured debt + equity-linked warrants limit principal risk while providing upside exposure to high-growth technology companies.

Commonly referred to as “venture debt” lending, we provide select technology companies with secured loans. In exchange, we generate returns from interest and equity linked capital appreciation aligning the fund and our investors with the long term success of the borrower.

Illustrative Investment Structure

Features of Venture Debt

High Yields

In a world starved for yield, investors have been forced to increase risk to generate returns. Venture debt interest rates have remained robust despite exceedingly low loan loss rates.

Downside Protection

Venture debt has a long track record of exceptionally low loan losses, driven by low loan-to-value ratios, committed equity sponsors, short maturities, and senior security in performing businesses.

Upside Optionality

Equity-linked warrants provide exposure to the long term upside of high-growth tech startups, without having to pay up for equity at what are frequently lofty valuations.

Low Correlation

Venture debt returns have historically been relatively uncorrelated with other asset classes, adding diversification and reducing risk at the portfolio level.

Short Maturities

With typical maturities of 2 to 4 years on a performing business with strong equity backers, venture debt lenders don't have to predict the future a decade out.

Low Loan-to-Value

Despite interest rates comparable to distressed debt, venture loans are typically structured to represent just 5% to 15% of the value of a performing, high-growth business.

Loan sizes

$1 million to

$5 million

stage

Post-series A;

$10M+ of paid-in or earned-in capital;

$2M+ Revenue or

$1M+ ARR

Security

First or second lien secured loans

impact

Improved economic, environmental and social outcomes

loan structure

1-4 year delayed draw term loans with an initial disbursement and additional disbursements made available when performance conditions are met

Interest & Warrants

Annual interest: 10% to 15%

Warrant participation: 0.5% to 3% of

total equity value