Ze-Gen Arranges $2.5 Million in Venture Debt

Wade Roush1/10/08

Boston-based waste gasification startup Ze-Gen, which we profiled in August, has closed on $2.5 million in “venture debt” from Palo Alto, CA-based Pinnacle Ventures, the company said today. What’s venture debt? We wondered too, so we asked John Harper, Ze-Gen’s vice president of finance. “It is essentially a corporate loan,” Harper says. “Often, as in our case, the borrowers may be pre-revenue. Such loans often have some sort of equity upside feature to compensate for the incremental risk.” Venture debt is one of Pinnacle’s specialties.

Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can e-mail him at wroush@xconomy.com or follow him on Twitter at twitter.com/wroush.