Capital Library

Business models do not fund themselves. Every model in the Business Model Library was shaped, often distorted, by the capital structure behind it. The terms investors set at the outset determine what the model must become.

This library maps the instruments: how each one works, what it expects in return, and what kind of organization it is suited for. Venture capital and grants are the ones most people know. But the range of available capital is much wider than that, and matching the right instrument to the right model, at the right stage, is one of the most consequential decisions any organization makes. The combination of business model and capital structure is where the real design happens.

Investors inject capital into a business in return for a share of ongoing revenues with a capped upside

Investors provide capital into a high growth technology business in exchange for an ownership share

An amount of money given to a for-profit or non-profit for a specific purpose after the completion of a qualifying process

A way to raise funds online by convincing a large number of people to each give money for a specific project or cause

A system of exchanging one service for another by using labor-time as a unit of value stored and redeemed between participants 

“Spark” money that helps prove a project or company works, so that larger, traditional investors have less risk joining in later.

A hybrid of short-term debt that converts to equity after a conversion event occurs (usually when a startup raises its next round of funding) 

A way of raising money from  a community of customers or backers to finance projects and businesses in exchange for small slivers of ownership 

Lenders provide capital to an organization that already has a resource that can be converted into cash, and the loan is secured by that resource or asset.  

 

 

The Simple Agreement for Future Equity (SAFE) Note is designed to speed the process and reduce the legal costs for the first round of growth company funding.

 

Investors provide capital into an organization with measurable social or environmental benefits and a path to growth or fiscal sustainability. 

Debt Crowdfunding is a way of raising money to finance projects and businesses based on small loans, ranging from high interest to low or no interest. 

A Social Impact Bond (SIB) is a multi-party contract enabling the government to pay for better social outcomes.

A debt-security instrument issued for the specific purpose of raising capital for projects with positive environmental outcomes.

A PRI is an investment made by a foundation to pursue its charitable mission rather than to generate income

Pedigree Capital is the value placed on a person or team whose prior experience and education are seen as kinetic potential for starting a company.

SPVs are a separate legal company created for one specific job, usually to own an asset, finance a project, or investment

Blended finance unites public, philanthropic and private capital in one investment vehicle, with each layer shouldering different levels of risk and return.

A financial arrangement where an owner sells an asset to an investor or financing company, and then leases it back for continued use

We have a long list of alternative capital types to explore, what do you think we should describe next?