Venture debt is a form of loan financing provided to high-growth startups or early-stage companies. It complements venture capital (equity investment) rather than replacing it.
Venture debt lenders provide loans to startups that typically already have venture capital funding. These loans carry interest and sometimes warrants (rights to buy shares in the future).
Startups use venture debt to raise capital without diluting ownership. It can serve as a 'bridge' between two equity funding rounds.
Bangladesh's startup ecosystem is still in its early stages, and venture debt is a relatively new concept. However, as the ecosystem matures, it could become an important funding tool.