Venture Debt, Runway Extension & Its Cost

Calculates the runway extension venture debt buys, its share of the last equity round, and the total interest cost of carrying it. Inputs are the debt raised, the size of the last equity round, monthly net burn, the interest rate, and months outstanding.

Interactive Tool

Venture debt raised

Last equity round

Monthly net burn

Interest rate

Months outstanding

Runway extension

10.0 mo

debt ÷ monthly net burn

Total interest cost

$550K

debt × rate × yrs outstanding

Share of the round

31%

debt ÷ equity round

When growth holds, venture debt is cheap runway, a few percent of interest versus the equity a raise would cost. When growth misses, a breached covenant lets the lender accelerate and the same loan becomes a cliff. Stress-test the downside before signing.

Learn the concept

This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.

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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.