---
title: "What Is Disbursement?"
term: "Disbursement"
description: "Disbursement is the outflow of cash from a company, fund, or lender to pay expenses, fulfill investments, or release loan proceeds to a borrower."
date: 2026-07-25T00:00:00.000Z
updated: 2026-07-25T00:00:00.000Z
topics: ["venture-capital"]
source: https://venturecapitaltracker.com/glossary/disbursement
---

# What Is Disbursement?

> Disbursement is the outflow of cash from a company, fund, or lender to pay expenses, fulfill investments, or release loan proceeds to a borrower.

**Disbursement** is the payment of funds from one party to another — operating expenses for startups, investment proceeds from funds, or loan draws from lenders.

### How it works

In venture financing, **disbursement** often means the date investment cash hits the company's bank after legal close — sometimes split across tranches tied to milestones.

Venture debt disbursements may be single upfront wires or staged draws with conditions. Founders plan payroll and vendor payments around actual receipt, not term sheet signing.

For VC funds, LPs fulfill [capital calls](/glossary/capital-call); the GP disburses to portfolio companies. LP agreements specify notice periods and default penalties if LPs fail to fund.

Accounting teams track disbursements against approved budgets and purchase orders — distinct from **accounts payable accruals**, which recognize obligations before cash leaves.

Treasury controls prevent unauthorized disbursements — dual approvals on wires above thresholds.

### Why it matters

- **Founders:** Model cash using expected disbursement dates, not optimistic signatures. Bridge notes exist partly to cover close-to-wire gaps.
- **Investors:** Fund finance tracks uncalled vs disbursed capital — pacing affects IRR and dry powder available for new deals.

### Common mistake

Announcing a closed round before funds disburse and spending accordingly. Until cash clears, runway math has not changed.

### Related ideas

See also [capital call](/glossary/capital-call), venture debt draw, wire instructions, and treasury management.

## FAQ

### What is disbursement in simple terms?

Money leaving an account for a purpose — paying payroll, sending wire for an acquisition, or a VC fund wiring your round after close. It is cash out the door.

### Why does disbursement matter?

For founders, delayed disbursement after signing creates runway gaps. For investors, fund disbursements via capital calls must match LP agreements and investment pace.


---
Source: https://venturecapitaltracker.com/glossary/disbursement