The domestic venture debt model has been adapted to reflect the realities of the Indian market where value is created through strong execution and technology is more an enabler rather than the core differentiator. One question which crops up consistently is: does a start-up opt for venture debt because it could not raise equity? The fundamental premise of venture debt is NOT to take equity risk as that is a sure-shot path to adverse portfolio outcomes. Hence, there is a high alignment of interest logically for venture debt with the founders as survival comes before growth. Venture debt is not intended for all start-ups.

Source: Mint September 15, 2016 18:33 UTC