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Key Takeaways Private debt has quietly stepped out of the shadows. What used to be a niche corner of finance has become one of the fastest-growing investment plays for big institutions.
For founders, that shift is both exciting and daunting. It opens a fresh source of capital beyond banks and venture firms, but it also comes with heavier demands around reporting, governance and financial discipline.
Private debt is on the rise. The roots go back to the 2008 financial crisis. As banks tightened lending to small and mid-sized businesses, large investors — pension funds, insurers, sovereign wealth funds — were left hunting for returns in a low-interest world.
According to statistics, private debt assets under management surpassed $1.5 trillion globally in 2024, with no signs of slowing the growth trajectory. Private debt has stayed steady through tough times — from the pandemic to rising inflation. While other markets rose and fell, it kept attracting money, showing investors trust it as a stable, long-term bet.
For entrepreneurs, this wave of capital means private credit funds are no longer operating on the fringes. They now have a main character moment, but they play by different rules than either venture capitalists or banks.
Related: How to Pick the Right Debt Provider for Your Business
The entrepreneur’s reality
Here’s where things get interesting. A venture capitalist may accept a certain level of chaos in pursuit of growth, while a bank generally offers standardized terms with minimal engagement beyond credit risk. Private debt funds sit in the middle. They want structured deals, covenants that can be enforced and reliable performance.
In one of my own ventures, I learned this the hard way. We had secured a loan from a non-bank lender and assumed quarterly reports would be enough. Instead, they expected rolling forecasts, customer churn data and stress scenarios for downturns. At the time, our finance function wasn’t built to handle that level of scrutiny. The result was sleepless nights trying to backfill reporting systems that should have been in place from day one.
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