Research across 59 countries shows venture debt reshapes startup finance by reducing early-stage equity, increasing late-stage investment, and expanding the total pool of capital

A new international study has found that venture debt is reshaping how capital moves through technology startup ecosystems around the world. Analysing data from 59 countries between 2015 and 2024, the researchers show that greater venture debt availability is associated with lower early-stage equity funding, higher late-stage equity funding and a positive overall effect on the total capital available to startups.

Published in International Review of Economics and Finance by researchers from the Edinburgh Business School based at Heriot-Watt University, the study is the first to provide an international comparison of venture debt and its influence on equity funding. The research argues that venture debt should not be seen as a passive supplement to equity, but as a strategic financial instrument that can reshape innovation pathways.

New study shows that the environmental damage caused by the world’s highest-consuming 10% of people is worth $1.7 trillion to $5.7 trillion a year. At the central and upper estimates this is several times more than the international community has committed to spend on climate action and biodiversity conservation combined, and is on the scale of the funding estimated to be needed globally to address these crises.