Venture debt marketplace 8vdX has launched an initiative called Seedex Booster, which aims to provide additional funding of up to $1 million to startups in Pre-Series A rounds.
Seedex Booster will invest up to 25% of the amount raised in the Seed Extension round in startups with an average ticket size of $250,000-1 million, as per reported by VCCircle.
The firm also claims that the program is designed to be repaid with Series A funding, but founders have the option of creating an amortization schedule to repay the loan or extend it at maturity.
The new offering under the Y-Combinator initiative will provide bridge loans to startups till Demo Day. In a statement, 8vdX said it seeks to address the challenges founders face in the current fundraising environment by providing a funding runway that will enable startups to meet the expectations of Series A investors.
In an interview with VCCircle in March 2022, the firm said that, according to research, traditional venture loan options are not founder-friendly as startups need to provide personal guarantees, offer cash flows, open captive bank accounts with lenders happens, etc. It is a time-consuming process that does not match the speed at which these startups are growing.
“Our goal is to help startups achieve their potential and raise Series A funds. We believe that Seedex Booster will be a valuable tool in achieving this,” said Lavhale in a statement.
8vdX is a venture debt marketplace that allows early-stage startups to easily raise capital. Ravi Chachra and Vijay Lavhale set up 8vdX in 2021.