The Dime 💰 - Private Credit & Startups: An Evolving Marketplace

Private credit is no longer a back-office alternative for distressed companies. It is now one of the most powerful and fastest-growing options in finance. This week, BlackRock finalized its $12.5 billion acquisition of HPS Investment Partners, a move that brings its private credit portfolio to more than $220 billion and puts the firm in the top tier alongside Apollo, KKR, and Ares. If you are a founder, operator, or early-stage investor, this is a big deal. Private credit (in Startups, usually called "Venture Debt") is not just a source of capital, it is a new source of control, and understanding how it works is now essential.

What Is Private Credit?

Private credit, sometimes called direct lending, refers to nonbank institutions, like private equity firms, asset managers, and hedge funds, lending directly to businesses without going through public markets or traditional banks. These loans are often large, customized, and come with contractual terms that govern not just the repayment schedule, but also what the borrower can and cannot do. The growth has been staggering. According to the Financial Times, private credit has more than doubled in the past five years and is expected to top $2.3 trillion globally by the end of 2025.