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Your downside risk remains the same (lose loaned money), but your upside gains increase substantially (interest vs interest+acquisition/ipo income). Thus the risk becomes more tolerable.

The warrants are stock options - free to be given. SVB is not paying for them. It increases their potential upside beyond the interest rate. Across a portfolio it makes up for defaults.

Unless your whole portfolio is correlated...

Surely the quote is talking about average risk. Yeah, adding amy investment to a portfolio will increase overall risk, but debt in startups is a lot riskier than equity since most fail and debt caps your upside.