Headquartered in Palo Alto, California, Hercules Capital is one of the largest non-bank venture debt lenders. Since its inception in 2003, it has made over $14.0 billion in capital commitments to over 570 emerging growth companies (Source - August 2022). Hercules Capital is publicly traded on the NYSE (HTGC).
About Hercules Capital
Hercules Capital began operations in 2003 and currently has 72 employees (Source - August 2022). Its portfolio consists of over 570 companies, including Annie’s, Ancestry.com, DocuSign, Evernote, Facebook, FanDuel, Lyft, Pac-West Telecomm, Palantir Technologies, and Sling Media. (Source - August 2022)
Investment and debt facilities are managed by different teams which are split up by industry: Life Sciences, Technology, SaaS, Finance, Sustainability & Renewables, and Special Situations.
Eligibility & Products Offered
Hercules Capital provides venture debt to emerging growth, pre-IPO, and M&A companies based in the United States.
Geographically, Hercules considers investment in companies located in the Western, Mid-Atlantic, Southeastern, and Midwestern U.S. Typically, they offer venture debt to private companies but have also invested in public companies.
Hercules Capital typically focuses on sectors such as technology, life sciences, SaaS Finance, and Sustainable and Renewable tech.
While Hercules Capital primarily concentrates on venture debt, they also offer equity financing and equipment leasing services.
Typical debt facilities range from $5 million to $200 million. Hercules Capital allows for a portion of certain debt investments to convert into equity. They also co-invest with other private equity firms.
The firm offers structured debt with warrants which typically have maturities between two and seven years, with an average of three years. Senior debt has an investment horizon of fewer than three years. (Source - August 2022).
It is worth noting that Hercules Capital has different eligibility, approved use cases, and deal characteristics depending on the industry.
How to Apply
To apply, interested companies should complete a form on the appropriate team's contact page (i.e., technology companies reach out to the technology team, SaaS companies to the SaaS team, etc.). From there, a member of their investment team will reach out and begin the dialogue.
Capchase vs. Hercules Capital
In addition to financing using venture debt from Hercules Capital, founders and startups can work with Capchase. When compared to Hercules Capital, Capchase’s funding model is designed to remove excess fees that can save clients up to 50% when compared to traditional venture debt providers (Source – June 2022).
It can be helpful to see the differences between Capchase and Hercules Capital side-by-side. This is especially true for key areas like speed to funding, flexibility, structure & fees, and value add.
Speed
Capchase
24 hours to underwrite (led by a tech-driven & highly responsive underwriting system)
Hercules Capital
Often an extended diligence process
Flexibility
Capchase
Highly Flexible: No traditional financial covenants on amounts financed
Hercules Capital
Somewhat Flexible: set debt warrants, fixed maturities
Structure & Fees
Capchase
Transparent & Simple: No prepayment fees, closing fees, warrants, or hidden fees
Hercules Capital
Often include terms around prepayment, expensive closing process, warrants, admin fees
Value Add
Capchase
A prescriptive funding plan
Hercules Capital
Discrete funding events
