The Smart Money Move: Radovan Nesrsta on Why Venture Debt Is Reshaping CEE Startup Financing

When Radovan Nesrsta launched Orbit Capital six years ago, venture debt was virtually unheard of in Central and Eastern Europe. Local banks were focused on hard collateral, equity was expensive, and young scaleups had few financing alternatives. Today, Orbit Capital has grown into the region’s pioneering venture debt provider, backing ambitious founders with non-dilutive growth capital at a time when efficiency and runway matter more than ever. With the firm’s second fund already on track to hit €100 million, Radovan reflects on how the financing landscape has shifted and why venture debt is becoming an essential tool in every founder’s playbook.

You have experience as a former CEO, consultant, and founder yourself. From that perspective, what specific criteria does Orbit Capital use to qualify companies for venture debt funding?

We look at three things first, not different from most equity investors. First, we evaluate product–market fit and ask whether the problem is real, painful, and solved in a unique way. This foundational element tells us if there’s genuine demand for what the company is building.

Second, we examine business model health by looking at CAC/LTV ratios, margins, and overall capital efficiency. These metrics reveal whether the company has sustainable unit economics that can support debt repayment.

Third, we consider timing and whether the company is mature enough to benefit from venture debt, or if founders should still focus 100% on perfecting the product. Getting the timing right is crucial for both the company’s success and our investment thesis.

A few months ago, you announced the first close of Venture Debt II at €70 million, targeting €100 million by year-end. Five years ago, you introduced venture debt to the underfunded CEE region. Can you walk us through what venture debt actually is and why it’s particularly relevant for tech startups in Central and Eastern Europe right now?

Venture debt is a complementary form of growth financing, typically structured as a medium-term loan to scaling companies that have strong growth potential but are not yet cash-flow positive. It’s not meant to replace equity; rather, it extends runway, smooths capital needs, and helps founders optimize dilution. 

In CEE, it’s particularly relevant because we have an increasingly mature venture ecosystem: more late-stage rounds, more repeat founders, and more international investors. Yet, scaleups still face structural barriers—local banks are highly collateral-driven, and public capital markets remain shallow for young tech companies. Venture debt bridges that gap by aligning with venture capital dynamics while offering a non-dilutive layer of capital at the right stage of growth.

You mention that venture debt is “4 times cheaper than equity.” Can you break down the main benefits of venture debt compared to traditional equity financing, and how does it help founders raise funds without diluting ownership while still accessing growth capital?

Equity is forever. Sell 20% now and you carry that dilution into every round. Venture debt typically costs moderate interest plus small warrants, making it about four times cheaper when you model exit outcomes. It’s also faster to arrange, flexible to draw, and lets founders hit milestones that unlock better valuations.

The CEE region has unique challenges when it comes to accessing traditional bank financing for tech companies. How does Orbit Capital’s approach to venture debt address these gaps, and what advantages do you see in the regional ecosystem that international lenders might overlook?

Traditional banks here only lend against hard assets. That doesn’t work for SaaS or marketplaces. We focus instead on unit economics, growth trajectory, and investor quality. And because we’re local, we see what international lenders often miss: CEE founders are capital-efficient by necessity, which makes them less risky, not more.

As someone who’s been both an operator and investor, what kinds of risks should startups be aware of when considering venture debt? How do you help founders understand whether venture debt is the right choice for their specific growth stage and business model?

It’s not free money. The key risks are repayment pressure and covenants. If a company is too early or cash flows are unpredictable, debt can become a burden. We help founders stress-test scenarios and sometimes advise them to wait. The best fit is post-Series A/B with visibility on the next round or breakeven.

After five years of growth from a pioneering project to a team of ten, how has the venture debt market evolved in CEE? What changes have you seen in founder awareness and acceptance of this financing model?

Five years ago, people asked, “Are you crazy? Lending to companies that burn cash?” We spent the first years explaining. Once the first deals closed and founders saw the benefits, adoption accelerated. Today, we see five or more serious opportunities a week. Founders here are naturally curious and fast to adapt.

Beyond providing capital, what role does Orbit Capital play in supporting portfolio companies? How does your background as a former CEO influence the strategic guidance you provide to founders? 

Capital is just the start. We act as sparring partners—helping with trade-offs between growth and profitability, fundraising strategy, and capital allocation. Having been a CEO, I understand the pressure of KPIs and boards. We don’t take board seats, but we’re always available as a financial yet entrepreneurial coach.

You’re anticipating growing interest from fast-growing companies over the next 3-5 years. Looking at the increasing number of startups and ambitious founders in CEE, how do you see venture debt fitting into the overall capital structure strategy for high-growth tech companies?

In the US and Western Europe, venture debt is standard—10–20% of late-stage capital. CEE will get there quickly. In a €30m Series C, you’ll likely see €5–10m of debt layered in. It balances dilution, extends runway, and signals financial sophistication to global investors.

You mentioned that venture debt is particularly popular among serial founders who’ve experienced costly dilution in previous projects. How does venture debt help extend a startup’s runway and prepare for future equity rounds, especially in markets where follow-on funding might be more challenging?

Because they’ve felt the pain of early dilution. A €5m facility can extend runway 12–18 months, often doubling or tripling valuation before the next round. In tougher markets, it buys time to reach breakeven or prove capital efficiency. In venture, timing is everything—and debt buys time.

How do you see the venture debt market evolving in Europe, and what’s your vision for Orbit Capital’s role in that future landscape?

We’re at an inflection point. A decade ago, only a handful of specialized lenders existed in London. Today, venture debt is institutionalized across the continent. In the next five years, I expect three shifts:

• Regional specialization: funds like ours that understand local ecosystems will co-exist with pan-European players.

• Product innovation: hybrid structures combining debt with revenue-based financing, or facilities tailored to recurring-revenue companies.

• Founder mindset change: venture debt will move from “exotic” to “expected” in every serious growth round.

For Europe, and CEE in particular, it means founders will finally have access to the same financing tools that Silicon Valley has enjoyed for decades, which will accelerate scaling stories from the region.

Finally, for founders and entrepreneurs who will be at How to Web Conference 2025, what’s your most important piece of advice about optimizing their capital structure and growth strategy? How can people connect with you to explore potential venture debt opportunities?

Remember: equity is the most expensive form of capital. Do the math, think about compounding, and as soon as your company is ready—explore debt. And if you’re not ready yet, a good venture debt fund will be honest enough to tell you.

Let’s meet at How to Web Conference 2025

For founders in CEE, the rules of startup financing are changing fast. Venture debt is no longer an exotic option; it’s becoming a core part of scaling smarter, raising on better terms, and holding onto more ownership in the process. As global investors look increasingly toward the region, Orbit Capital is positioning itself at the center of this shift, giving entrepreneurs the tools to compete on the same footing as their peers in Silicon Valley.

Join Radovan and his team at How to Web Conference to learn more about venture debt options for your startup! Whether you’re exploring capital structure optimization or just curious about the subject, this conversation could reshape how you think about funding your growth while maintaining control of your company.