Member Contact: Amirapu (Soma) Somasekhar
Position: President and CEO
Industry: Industry Support Services
GLSC is in the process of setting up a specialized finance company to offer debt to the life sciences industry in Australia.
Venture debt (also known as emerging technology debt, or growth capital) has been popular in the US for more than 40 years. It supplements venture equity and is used selectively to extend the cash runway available to a company to defer its next equity round to a better time. Debt lowers the average cost of capital, mitigates the dilution existing shareholders suffer at each equity round and enables them retain a larger portion of the value created.
GLSC represents a team of international bankers, US based venture lenders, and eminent Australians and is well positioned to offer a new source of capital to the growing Australian life sciences industry.
Features of a venture loan:
1. 3-year loans with equal monthly payments servicing interest and principal
2. The loan is secured by all the assets of the borrower.
3. Pricing varies by perceived risk. Consists of fees, interest and equity warrants.
4. Credit worthiness is evaluated by the quality of the science, quality of main equity sponsors, large unmet needs or approved orphan status, credentials of the management team, and their earlier experience in successfully running start-ups.
5. Timing. A good time to consider a loan is when a company is planning an equity round. A loan can reduce the size of a dilutive, equity round.
A (Soma) Somasekhar CFA
Global Life Sciences Capital Inc
Rye, NY 10580, USA
US Cell +1 914 844 8016
Aus cell + 61 40 515 8421