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There are two pretty big differences. The first is that venture debt is usually only available to very established companies, as far as startups go, and have restrictive covenants (regarding cash balance, profitability, other indebtedness, etc). The second is that most venture debt comes with warrant coverage, so the lender ends up taking equity as well.

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I have had a couple of runs at venture financing and the terms in Silicon Valley can be pretty onerous, especially if you don't have a lot of cash and revenues less than $10M per annum. Silicon Valley Bank for example effectively won't loan you money you don't already have in your balance with them.

This can be a disillusioning experience but if you flip it around the bankers providing the financing don't get anywhere near as much upside as a traditional VC. Their caution is understandable.

But in this case, it sounds like indie.vc gets the equity kicker as well at a liquidity event.

The covenants could be a big difference. Surprised that Indie.vc doesn't have any.

The instruments is essentially a modified SAFE with a clause for distributions (which keys off a multiple of the founder's salary) and no expiration date. The intent was to keep it simple, clear and relatively toothless.

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