Silicon Valley's oldest venture debt fund is eyeing Australia for opportunities
The fall of Silicon Valley Bank has created a tectonic shift in the market of lending to startups. And Western Technology Investment is looking to capitalise.
The chairman of Silicon Valley's oldest venture debt fund has a message for Australian founders and investors. “Venture debt is like a drug; if you use it according to the label it’s beautiful, it can really help you. But if you overuse it or abuse it, it can kill you”.
Maurice Werdegar, the chairman of San Francisco-based Western Technology Investment (WTI) was in Sydney last week on the invitation of Blackbird Ventures' Rick Baker as it begins the process of raising its 11th fund.
WTI has close links to Australia. It was an early limited partner (LP) to Blackbird and loaned USD15 million to ASX-listed Marley Spoon in 2019. Werdegar was an also angel creditor to Facebook when it was a college networking site, to Google during its Series A round and to Peter Thiel's AI software platform Palantir Technologies.
Werdegar says venture debt - startup loans which do not give up ownership in return for capital - should be complementary to equity and never a substitute.
