Mezzanine debt is a hybrid of debt and equity financing lending instrument that gives the lender the right to convert to an equity interest for ownership in the asset if the loan is not paid back in time or goes into default, generally after the venture capitalists and other senior lenders are paid off. Mezzanine debt is more expensive than senior debt but cheaper than equity.
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Investing in venture capital funds is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors.