Dec 1, 2021 · 24m · we-live-to-build
300 Portfolio Companies Later, 22 Became Unicorns Without Diluting
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of We Live to Build, host Sean Weisbrot and Innoven Capital partner Paul Ong explore the mechanics, strategic value, and ecosystem dynamics of venture debt in Asia. They discuss how VC-backed startups can leverage structured, non-dilutive loans alongside equity to extend runway, maintain ownership, and accelerate sustainable growth.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Sean holds 35.3% of the talking time here. How this is scored →
Sean as informed peer 3.3 Guest teaching 3.7 Guest disagreement 1.0 Sean pushing back 2.2
speaking balance: gold is Sean, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 18:17 Pushing back against Sean's VC dilution premise
Paul directly challenges Sean's scenario by demonstrating the mathematical advantage of blending debt with equity to amplify runway rather than drain capital.
Hardest push from Sean ▶ 17:47 Roleplaying skeptical VC on debt repaymentSean firmly pushes back against the premise of taking debt after an equity round, pointing out that VCs expect their cash to fund growth rather than service loan amortization.
Biggest teaching moment ▶ 16:46 Deleveraging versus bullet loan repaymentsPaul breaks down the mechanics of monthly deleveraging, reframing Sean's belief that all debt repels future equity investors by showing how reduced principal eases investor concern.
Sean holds their own ▶ 19:26 Synthesizing founder-investor alignment dynamicsSean demonstrates deep startup and investor knowledge by articulating how differing investor pocket sizes and risk appetites dictate whether venture debt is acceptable.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Sean as informed peer | Guest teaching | Guest disagreement | Sean pushing back | Why |
|---|---|---|---|---|---|---|
| Introducing Innoven Capital and Asia's Venture Debt Market | 3 | 2 | 0 | 0 | The exchange is introductory and cordial. Sean shares his background fundraising for startups in China to empathize with the fundraising grind, while Paul introduces Innoven Capital's position in venture debt. | |
| Deal Sourcing Mechanics and Dual-Role Venture Banking | 2 | 4 | 0 | 0 | Sean asks a straightforward exploratory question regarding lead generation. Paul educates the host on the dual role of venture debt lenders acting both as private bankers to founders and merchant bankers to companies. | |
| Collaborative Partnerships Between Venture Debt and Venture Capital | 3 | 3 | 1 | 2 | Sean probes whether venture debt firms compete with traditional venture capitalists. Paul outlines the collaborative nature of venture debt, and Sean validates this with his personal experiences establishing regional networks across Asia. | |
| Loan Terms and the Power of Deleveraging | 4 | 6 | 2 | 5 | Sean challenges Paul by presenting conventional wisdom that equity investors dislike investing into debt-laden startups. Paul provides a detailed credit lesson explaining how monthly amortization minimizes outstanding liabilities before future equity rounds. | |
| Balancing Venture Debt with Equity Investor Expectations | 6 | 5 | 3 | 6 | Sean presses hard from a VC perspective, arguing that debt repayment siphons capital away from direct operational growth. Paul counters by illustrating capital blending and leverage mechanics before Sean summarizes the delicate alignment needed between founders and VC board members. | |
| Paul Ong's Career Path and Credit Analysis Philosophy | 2 | 2 | 0 | 0 | The conversation shifts to career history and philosophy. Paul explains the importance of credit analysis skills from his DBS banking background, and Sean gently wraps up the discussion. |
Statements from this episode (11)
InnoVen Capital is Asia's largest venture debt provider
“Innovin Capital is Asia's largest venture debt provider with offices in India, in China, as well as in Singapore for the Southeast Asian region.”
InnoVen Capital backed 22 unicorns from a $500M AUM fund
“We have grown to about a half a billion in AUM. We've worked with over 300 portfolio companies. We're lucky to count 22 of them that have grown into unicorns.”
Venture debt dilution savings primarily benefit startup founders, not the company
“Now, if it's a matter of dilution, or if it's a matter of wanting to cheapen your cost of capital, that cost Savings. Typically it's to the founder and not to the company. If I, as a founder raise equity, I'm diluting my shares. If I, as a founder raise debt, …”
InnoVen receives venture debt leads from VCs for specific structural use cases
“We get more introductions from VCs when there's a specific utility, a specific use case that they want us to explore. So for example, if a B to B SaaS company has a growing receivables book, or if a hardware company needs, you know, more financing to for inven…”
InnoVen specifically targets unprofitable, cash-burning technology startups for venture debt
“The kind of companies that we look for as a start, they are companies that
Are in the technology space and that they're burning money.
So they're not profitable.
There's still a cash burn for growth, et cetera.”
InnoVen Capital is jointly owned by Singapore's Temasek and UOB Bank
“We're a fund that is owned by Temasek, which is the Singaporean sovereign wealth fund, as well as a bank
Called ULB Bank, which is a highly acclaimed regional bank headquartered in Singapore that has footprint all across Southeast Asia.”
InnoVen leveraged its OYO investment in India to back RedDoorz in SEA
“So we have a portfolio in India called OYO, which is, you know, about to be a listed company in the accommodation space.
They are essentially counterpart in Southeast Asia, a company called Red Doors.
And our familiarity with OYO in India has helped us to make…”
InnoVen typically structures venture debt as two-to-three-year monthly amortizing term loans
“This is a blanket sort of summary, but it's typically a term loan with a tenure of somewhere between two to three years. What that basically means is that we provide the capital upfront and it gets paid back essentially on a monthly basis, principal plus a lit…”
Startups using lump-sum bullet debt repayments become less alluring to future VCs
“And what we've realized is that companies that don't deleverage, let's say you borrowed five million, prefer to pay Five million all at one shot after like two years or three years. That takes away from the allure of a company in the eyes of potential future i…”
Founders use venture debt to boost valuations ahead of future equity rounds
“So essentially what you are doing is you are leveraging the dollars that you bring in as a founder to unlock Even more capital to bring you nearer term value such that when you need to go out to market again, you incorporate that value into your valuation, for…”
Venture debt taboo largely stems from founders' unfamiliarity and fear of default
“At the end of the day, I think a big reason why sometimes debt has a little bit of a taboo is because if you're unfamiliar with borrowing, or if you're borrowing, you know, too much, you always fear a situation in which, you know, what happens if things go sou…”