Stride Ventures: Fraud, NPAs, Evergreening and Predatory with Founders

Have been a part of the VC ecosystem for a while now, and have been a first hand observer of how Stride Ventures has been operating (vis a vis other Venture Debt players that have been around for ~15 years+).

Typical playbook:

1. Will do venture debt structures that hide/ mask the real cost of the debt from founders and leaves them in worse off positions. Multiple founders have come back complaining about this (Eg: A B2B player, a D2C brand in jewellery) - all of whom have spoken about their predatory practices. Another case of a D2C Natural BPC brand, where Stride marketed a product as freely available and then locked the liquidity by lying to the founders.

TLDR - Founders, consult your VCs before going to them, or go with the reliable VD players.

1. Takes risks that venture debt doesn't allow, outright lying to LPs, and hiding NPAs. Technically, if a fund manager has a debt AIF and NBFC also, there's a huge conflict of interest. They've used multiple vehicles to mask NPAs in other vehicles and refinanced / evergreened alot of facilities.

2. The worst of all - they have killed companies by their predatory tactics. Can't take names. But those who know. Receivable cycles, WC and revolver form the heartbeat for multiple credit heavy businesses. They have killed those businesses by lying about availability of facilities.

To top it all, the top management is downright predatory - will mask NPAs, evergreen loans, launch new vehicles and raise capital in those.

Too bad for them - LPs have caught this, and sooner than later - the music will stop when the vintage for Fund I is done and returns, MOIC, DPI - all fall flat (and worse - capital loss).

Mostly just an advice to founders, to have the long term view and chose right VCs / venture debt partners.