> the implosion of SVB et al took with it a lot of venture debt, which may result in unusual dilution down the road
Can you explain what this means?
Does it mean
(1) SVB used to a major holder of venture debt
(2) Now that they don't exist, no one is likely to buy venture debt
(3) therefore, companies have to issue more equity, leading to dilution
I’m not aware of banks as friendly today towards venture debt (really small business loans) as SVB et al were. There was probably a bubble in lending there in part due to crypto fraud. (VCs of course want this marketed as the Fed disrupting their house of cards through raising rates).
Will start-ups just issue more equity? It could be more likely they simply fail to raise anything.
Can you explain what this means? Does it mean (1) SVB used to a major holder of venture debt (2) Now that they don't exist, no one is likely to buy venture debt (3) therefore, companies have to issue more equity, leading to dilution