At Rocking Horse, we’ve been working tirelessly for a number of years to make sure we can help founders unlock smarter, faster, non-dilutive funding. But as companies grow, so do their funding needs — and the conversation naturally shifts from R&D tax credit loans and Grant advances to more strategic, growth-oriented finance.
That’s where Venture Debt comes in.
In our recent webinar with Wynn Thomas, of Nighthawk Innovation, we unpacked how venture debt actually works in practice, what businesses need in place before they apply, and how to avoid the common pitfalls that can derail an application before it even starts.
What Is Venture Debt — and Who Is It For?
Venture debt is designed for scaling, revenue-stage, or VC-backed businesses that are growing fast but want to extend runway without giving away more equity.
It complements rather than replaces equity. Think of it as fuel for the next stage of growth — whether that’s new hires, technology investment, or expanding into new markets.
At Nighthawk, we typically see facilities ranging from £1m to £5m, though larger bespoke arrangements are possible for high-growth scale-ups.
Even if your business isn’t quite at that level yet, it’s worth opening the conversation early. As Wynn explained during the session:
“It can’t hurt to prep ahead of time. Knowing what we’re looking for helps you get everything in place for when you’re ready to move.”
What Makes a Strong Venture Debt Application?
Unlike equity investors, who love “hockey-stick” forecasts and ambitious growth stories, lenders are downside-focused. They want to see solid fundamentals and a credible plan.
As Wynn put it:
“Aggressive forecasts are great, but without contracts or supporting evidence, it raises question marks. We’re not looking for hype — we’re looking for proof.”
That means:
- Healthy balance sheet fundamentals – manageable existing debt levels.
- Evidence-backed forecasts – realistic revenue assumptions supported by contracts or strong pipeline visibility.
- Clear use of proceeds – defined, measurable goals tied to operational delivery (e.g. hiring, scaling production, entering new markets).
The Biggest Red Flag? Treating Debt as a “Fail-Safe”
The number one mistake founders make, according to Wynn, is approaching debt as a last resort.
“If a company treats debt as a fail-safe when everything else doesn’t materialise, that’s the worst use case. You’ll always get better terms, and a higher chance of acceptance, if you’re in a strong, pre-planned financial position.”
In other words: plan debt before you need it.
Venture debt isn’t a lifeline; it’s a lever. Used right, it gives scaling businesses flexibility, stability, and control as they navigate between funding rounds.
When Should You Talk to a Venture Debt Provider?
Even if you’re not quite ready for a £1m+ facility, starting the conversation early helps. You’ll learn:
- What metrics investors and lenders will expect from your next round.
- How your R&D tax credits, grant advances, or receivables can fit into a blended finance strategy.
- What information to start collecting now so you can act quickly later.
Wynn summed it up well:
“Always happy to have a chat — even if you’re six months away from being ready. The earlier we start talking, the smoother the process will be.”
Final Takeaways
For UK scale-ups, the funding environment is changing fast. Equity rounds are taking longer. Bank lending is still cautious. And more founders are looking at venture debt as a way to keep momentum without dilution.
If your business has strong fundamentals, predictable revenue, and a clear growth plan, now’s the time to explore it.
At Rocking Horse, we work with Nighthawk to structure flexible, founder-friendly venture debt solutions that help businesses move faster — without giving up control.
📞 Ready to learn more?
You can book a call directly with me here → Book a conversation with Will Jones
Or explore how Rocking Horse x Nighthawk can help → Smarter Funding at Scale
