- Turbine raises $22M in equity funding plus $100M debt facility from Silicon Valley Bank.
- The platform allows LPs to borrow against appreciated fund positions without selling stakes.
- Their solution addresses liquidity challenges faced by individual investors in VC funds.
In a financial landscape where IPO scarcity has strained liquidity for venture capital investors, Turbine has emerged with a solution.
The debt platform for limited partners in private equity and venture capital announced its $22 million equity funding round co-led by Alpha Edison and TTV Capital, with participation from Fin Capital, B Capital, and Sozo Ventures.
Founded by entrepreneur Mike Hurst following his own liquidity challenges, Turbine offers credit secured by LP positions in venture funds.
After selling his payments startup Exactuals to City National Bank in 2018, Hurst invested heavily in tech stocks and venture funds, only to face a cash crunch when markets declined in 2022.
"Firms kept coming for capital calls and new investments. I wanted to make them, but I didn't want to mortgage the house, take a margin line or sell Amazon at $90 when I knew it was going back to $210," Hurst said.
Turbine's platform functions similarly to a home equity line of credit, allowing investors to borrow against the appreciated value of their fund positions.
For instance, if an LP's initial $3 million investment grows to $10 million, they can use the current valuation as collateral.
While the interest rate sits around 9%, Gardiner Garrard, co-founder and managing partner at TTV Capital, argues this represents "a very reasonable rate and a lot cheaper than the cost of selling" stakes on secondary markets, which typically come with significant discounts.
The company has also secured up to $100 million in debt financing from Silicon Valley Bank to fund its lending operations.
Currently serving the five venture firms that backed its equity raise, Turbine plans to expand its offering to more VC funds following this announcement.
Edited by Annette George
