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Oct. 28 (Bloomberg) –- Bloomberg’s Thomas Giles discusses how NBA referees will be reviewing plays using Samsung’s tablets. He speaks with Deirdre Bolton on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Welcome back to "money moves ." when you think about venture capital, you usually think of vc firms putting in cash, getting a piece of the start up in return.

Equity is not the only way that vc firms can invest.

In the last three years, venture debt is being used more and more, especially for later stage venture backed companies.

An investment advisory firm invests in startups using structured and secured debt investments.

He is the ceo.

Your business is growing and growing.

This is not even a few years old.

You opened in chicago, you have your east coast office in greenwich.

You just opened in palo alto.

How do you explain this growth?

Are you guys the only ones who understand this possibility of venture debt?


hercules is probably a leader in this space.

It is terrific debt.

It's very top of the structure.

The company is worth $200 million, the venture debt part of that is only $20 million.

We feel very comfortable lending to these experienced venture capital equity firms.

The people who are accepting the investment feel better because they're not giving a piece of their company of way.

Usually when you speak with founders, that's the biggest psychological hurdle they have to get over.

We need this money, we need to scale.

But i don't feel like giving it away to a vc firm.

What we found is what you're saying, between round a and b or c and d -- everyone gets squeamish.

They gets squeamish, but they need cash.

What they want to do is bridge the next equity round.

They still have a few more things to do to add that value that is necessary.

That is why our product is so valuable to them.

You know how this office space in greenwich.

You said -- palo alto has got to be the most expensive, right?

90 plus dollars a square foot.

Even $125 in some areas.

You have to be there, right?

What we realized is that michael david, who heads it for us, he plays on a golf course, or even kids play soccer very close.

That's how they do business.

It's about being there all the time.

We knew we had to be on the ground, just like when we did chicago.

So you are growing like gangbusters.

How is this changing the way you do business?

Is it changing the way you do investments, the size of investments you are making?

It's changing all the things we do for our clients.

Silas, they do venture and private equity.

We never were able to offer this product to david eichler.

We are able to help our customers through any type of financing.

We just acquired a company called health care finance group, with $800 million of assets in the city.

We can do one stops.

We can do almost anything for our clients.

It is one-stop shopping.

What does it say about the vc model?

We been talking about how it's being challenged on both ends.

You have choices you are offering to your clients.

A completely different stage, much earlier.

There are syndicates.

It seems like vc as an asset class is really getting squeezed from both ends.

You watch the wall street journal and the partners at linkedin making a fortune, and how they found each other at the helm of a very prominent person.

That is how those connections and personal meetings are made.

I see vc making a nice resurgence here.

We look at these disruptive technologies as very important for america's competitiveness.

If we can support that by lending to these brilliant firms that are finding the next technologies to make erica -- america great, that's great.

Is anything else catching your eye?

Aircraft leasing.

We're finding some planes.

We bought a 757. the older, safer ones right now.

As the european banks pull back from planes, that's another area.

My job is to be providing capital where capital is not.

Get your frequent flyer miles up and running.

Great to see you, leonard tannenbaum.

We have a break to take.

When we come back, the founder of the air b&b for dogs.

I sat down with the founder to talk about winning over very picky pet owners, securing the company's series b funding.

The former new jersey public pension fund cio tim walsh with me now.

Talking about capital flows in real estate between the u.s. and china.


This text has been automatically generated. It may not be 100% accurate.


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