Technology Lending and Venture Debt Financing

Troutman Sanders has significant experience in providing legal counsel to the venture debt and technology finance industry and venture capital financing industry, having counseled banks, venture debt funds and other non-banking entities which provide financing to (i) both early and late-stage technology companies that specialize in, among other things, life sciences, biotechnology, information technology, clean technology, hardware, software, SaaS, social media, cloud computing, medical devices, and pharmaceuticals, and (ii) venture capital funds and private equity firms that specialize in investing in early and late-stage technology companies. Over the past 17 years, Troutman Sanders’ tech lending team has represented lenders in tech lending transactions in excess of $17 billion.

Many of our tech lending and venture debt financing clients work closely with professional investors, private equity firms and venture capital funds that have a significant equity stake in the technology company that seeks financing from our clients. Such working relationships between the investors and our tech lending and venture debt financing clients are critical to the underwriting of this type of financing transaction. Types of financings we typically see in a tech lending and/or venture debt financing transaction include accounts receivable-based lines of credit, non-formula lines of credit, “recurring revenue” lines of credit, “venture debt” term loans and growth capital loans, and equipment term loans. Because many of these tech borrowers are startups and emerging companies that are not yet profitable or do not have significant assets to use as collateral (other than intellectual property, in some cases), our tech lending and venture debt financing clients will often structure their loan facilities with warrants to purchase stock or rights to invest in subsequent equity rounds, or will require the tech borrower’s intellectual property to be used as collateral if such intellectual property is of significant value. We are also well versed in aiding our venture capital financing clients in structuring capital call facilities with venture capital funds that often invest in the same technology companies that seek financing from our tech lending and venture debt financing clients.

With Troutman’s extensive experience in nearly every aspect of the tech lending and venture debt financing and venture capital financing industries, we can provide our clients with valuable guidance on how to structure these types of financing transactions and to navigate through complex intellectual property and securities issues that may arise during the underwriting, due diligence or documentation phase of such transactions.

Troutman Sanders regularly represents banking clients such as Silicon Valley Bank, Square 1 Bank, Wells Fargo Bank, City National Bank and venture lending clients such as Gold Hill Venture Lending, MidCap Financial, Oxford Finance, Horizon Technology Finance, and Harbert European Fund Advisors, among others.

Representative Experience

  • Represented a secured lender in an $80 million multi-national secured loan transaction secured by a blanket lien on all assets, including intellectual property and assets located in the United Kingdom.
  • Represented a lender in a $5 million secured growth capital term loan from to an e-commerce company, which is also secured by an equity pledge agreement by its Hong Kong subsidiary.
  • Represented a lender in a $1 million secured growth capital term loan to a mobile app developer company based in Singapore, and its Cayman parent entity.
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