Capital Structure

Recapitalization involves restructuring a startup’s debt and equity mix to stabilize finances, provide liquidity, or adjust ownership without selling the entire company.

An LBO uses significant borrowed money to acquire a company. It maximizes returns on equity but adds substantial risk through heavy debt obligations and interest payments.

Subordinated debt is a loan ranking below senior debt in repayment priority. It offers capital without immediate equity dilution but carries higher interest rates and risk.