Debt vs Equity

Cost of capital is the required return on investment for debt and equity. It determines the hurdle rate for deciding if a project adds value to your business.

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

This guide defines term loans, explains their interest structures, compares them to lines of credit, and outlines the specific scenarios where founders should use them to fund operations.