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What’s the difference between venture equity and venture debt?

April 26, 2017debt difference equity venture

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What’s the difference between venture equity and venture debt?

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A venture loan is a debt instrument which charges a fixed interest rate, while venture equity has a claim of partial ownership of the company. Venture debt is no different from a commercial bank loan except that it normally charges higher interest rate due to the risk level and it also requires a small portion of compensation by equity, usually in the form of warrant.