Maurice Werdegar is the longtime CEO of venture debt shop Western Technology Investment, one of the most active venture debt lenders in the United States Its also one of the older firms, having loaned out money for roughly 40 years to startups that needed to achieve certain milestones, reach profitability or wanted additional runway and didnt necessarily want to raise a new round (especially if that next round might be at a lower valuation).Its a needed service and a boon for startups in good times.
But when the market turns, debt can prove much trickier.Indeed, though Werdergar understands founders well he was once the CEO of a venture-backed restaurant chain that did really well until it didnt he also has to make certain that when the market shifts, things dont go south for WTI, as well.
That can mean long, hard conversations with founders who need to renegotiate their debt payments.Because COVID-19 is wreaking widespread economic havoc, we talked with Werdegar last week to learn whats happening in his world and what WTI can do for clients who are now in a bind.
Our chat has been edited for length.
A Technology News Room: There are other venture debt players out there.
How do you differ from your competitors?Maurice Werdegar: One is were not publicly traded; were a private BDC [business development company], so we get our money from institutional investors, university endowments, nonprofits, sovereign wealth funds and groups like that.
Were a team thats comprised primarily of former entrepreneurs; all of us have started and run our own businesses and work closely in the entrepreneurial environments.
And we dont use financial covenants, nor do we use subjective defaults.