Tacora Raises $268.7M in New Venture Debt Fund

Tacora Capital Secures $268.7 Million for Second Venture Debt Fund

Tacora Capital, a venture debt specialist located in Texas, has successfully closed its second fund with $268.7 million in commitments, as detailed in a recent filing with the Securities and Exchange Commission (SEC).

Initial Fund and Peter Thiel's Investment

The firm’s first fund, established in 2022, garnered approximately $350 million. A significant portion of this initial capital, around $250 million, came from Peter Thiel, a well-known Republican billionaire and investor.

This investment was noted by Bloomberg as being particularly substantial for Thiel at the time.

Investor Details and Current Fund

The current investor base for Tacora’s latest fund consists of 28 entities, though their identities remain undisclosed in the SEC filing.

Keri Findley, the founder and CEO of Tacora, has not confirmed whether Thiel participated in this funding round.

Requests for comment sent to representatives of Thiel have not yet received a response.

Company Background and Founding

Tacora was founded in 2021 and is headquartered in Austin, Texas.

Findley’s initial connection with Thiel originated when she was a partner at Third Point, a hedge fund, and interacted with Thiel Capital, Thiel’s venture capital firm.

Fund Performance and Financing Approach

According to Findley, the success of the inaugural fund and the continuing demand for flexible, non-leveraged financing options drove the creation of the new fund.

Venture Debt Explained

Venture debt firms provide capital to startups and businesses through loans, differing from traditional venture capital firms that acquire equity.

This financing method appeals to founders seeking funds without relinquishing ownership stake.

Tacora focuses on lending to companies with significant capital requirements, such as those in the fintech and hardware sectors, as Findley explained.

Specific portfolio companies have not been publicly disclosed by Tacora.

Risk Mitigation in Venture Debt

A potential risk associated with venture debt is the possibility of startups being unable to repay their loans, particularly given their often high cash burn rates.

Tacora mitigates this risk by focusing on loans secured by “specific, strong assets owned by well-positioned companies,” as stated in a press release regarding its first fund.

This approach aims to ensure loan repayment even in challenging economic conditions.