Capital Has Terms. Read Them Before You Need Them.

Founders often shop for capital by price. Experienced owners shop for terms. The difference shows up years later, in who controls the decisions that matter.

Ask What the Capital Is For Growth capital, working capital, and rescue capital are not interchangeable. Money raised to fund a known, repeatable return is a different instrument from money raised to buy time. Naming the purpose honestly determines which structures are appropriate and which are simply expensive.

Dilution Is a Governance Event Selling equity transfers more than economics. It can transfer board seats, veto rights, information rights, approval thresholds, and a claim on how and when the company exits. Read the control provisions with the same attention you give the valuation, because they outlive it.

Debt Has Covenants, Not Just Payments A loan's real risk sits in its conditions: personal guarantees, collateral, reporting requirements, ratios you must maintain, and what constitutes default. A rate you can afford under a covenant you cannot sustain is not affordable.

Model the Downside Before You Sign Run the case where revenue arrives later and smaller than planned. If the structure only works in the optimistic scenario, the structure is the risk. Owners who survive contractions are usually the ones who priced the contraction in advance.

The Cheapest Capital Is Often Your Own Discipline Retained earnings, collected receivables, better payment terms, and disciplined pricing fund growth without transferring control. Outside capital is a legitimate tool, but it should be chosen — not reached for because internal operations were never tightened.