7 things for entrepreneurs to know about debt and equity [Video]

The idea of using debt to support businesses in healthcare and life sciences tends to be viewed warily and with good reason. At MidAmerica Healthcare Venture Forum this week, GE Capital senior vice president in life sciences Joe Hammer offered up some helpful insights on the different kinds of debt available to biotech and medical device companies, from pre-revenue stage companies to more mature businesses.

Evolution of debt Debt for early stage companies has evolved from equipment based purchases which would incur debt. With the transition to more virtual companies with limited value, venture debt take the first lean on all assets, most likely carve out IP which allowed lenders to provide more cash runway. Currently there’s much more collaboration between lenders.

Three levels of debt for life sciences Bank debt tends to come in at preclinical level from $200,00 to $10 million. Venture debt comes in after the safety profile has been established around the time of phase 2 …