Tripled in the three years following the first transaction.
The entire growth phase was funded with debt. The cap table did not move.
Drawn across three years as new contracts arrived, not in one lump sum.
When they did sell a piece, they chose from a wide field of VC options.
The situation
The company demonstrated proof of concept, then landed multiple contracts far sooner than anyone had modeled.
The opportunity was immediate: scale delivery now, or watch the window close on work already won.
They needed substantial capital, and capital that could flex as the picture changed month to month.
The decision
The default move at that stage is to raise. Investors were available and interested.
The founders ran a different calculation. Revenue-based financing cost roughly twenty cents on the dollar, before early-payoff discounts. Selling equity at their then-current valuation meant a permanent claim on everything the company became afterward. They chose the debt.
Twenty cents on the dollar would look cheap next to what a single percentage point of the company would be worth once the growth actually landed.
THREE YEARS LATER
What the founders describe as a one-time transaction did not stay that way.
01
One deal became a relationship
The transaction everyone treated as a single event turned into millions in financing, structured and drawn repeatedly as new contracts arrived.
02
The upside stayed with the founders
Valuation tripled over the same period. Because the growth was funded with debt, that increase landed on the founders' side of the cap table instead of being shared out early.
03
They raised from a position of strength
When they eventually sold a piece of the company, they negotiated with proven traction, a wide array of VC options, and no urgency forcing the terms.
CASE STUDY FAQ
Common Questions
What was the business trying to solve?
The company needed to scale delivery for contracts that arrived sooner than modeled, while the founders wanted to fund the growth without selling shares.
What financing structure was used?
The founders chose debt through revenue-based financing, drawn repeatedly as new contracts arrived rather than funded in one lump sum.
What was the main constraint?
The opportunity was immediate, and the business needed substantial capital that could flex as the picture changed month to month.
NEXT STEP
Facing the same choice? Let's run the math on your file first.
Debt is not always the right answer. It was here because the revenue was contracted and the window was short. Worth knowing before you price a round.
Client details anonymized at their request. This describes the outcome of one client engagement and is not a prediction, projection, or guarantee of results. Financing costs, structures, and outcomes vary significantly by file. Nothing here is investment, legal, or tax advice. Custom Capital Advisors is not a direct lender, and nothing here is an offer of credit or a guarantee of approval, rate, amount, or timing. All terms subject to lender review of your documentation.
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