VetIgnite

Funding 101

Different problems need different money.

A practical guide to every major form of capital available to a veteran-owned business, what each one costs, who it fits, and the trade-off you are actually signing up for. Read this before you reach out to anyone.

How to read these primers

  • Stage fit tells you when the capital is appropriate for your business maturity.
  • Dilution means how much of your company you give up. Loans and grants are zero. Equity is real.
  • Cost of capital is the true all-in price, interest plus expected return for equity.
  • Real talk is the part most guides skip. Read it twice.

Debt

Line of Credit / Working Capital Line

Revolving credit you draw on as needed for short-term needs.

Check size
$25K to $5M
Cost of capital
Prime + 1% to prime + 6%
Dilution
No dilution
Repayment
Variable repayment
Stage fit
Early revenueGrowingScalingMature

Best for

Smoothing cash flow gaps, covering payroll between invoices, opportunistic inventory buys.

Watch-outs

Easy to draw down to fund operating losses. If you cannot pay it back inside 12 months, it is a structural problem, not a cash-flow one.

Real talk

Set this up before you need it. Banks lend to people who do not appear desperate. Even a $50K line you never use is a strategic asset.

Equity

Private Equity (Lower Middle Market)

Funds buying control or significant minority stakes in established businesses doing $5M+ in revenue.

Check size
$5M to $100M+
Cost of capital
Significant dilution, often loss of operating control
Dilution
High dilution
Repayment
Repaid at exit
Stage fit
ScalingMature

Best for

Cash-flowing businesses with $1M+ EBITDA, owners ready for partial liquidity or acquisition rollups.

Watch-outs

PE optimizes for resale in 3 to 7 years. If the firm's playbook does not match yours, you will be the one who changes.

Real talk

The 160 firms in the Equity Capital Providers directory mostly fit here. Match check size and sector before reaching out.

Hybrid

SBIC (Small Business Investment Company)

SBA-licensed funds that combine government leverage with private capital to invest debt and equity.

Check size
$1M to $50M
Cost of capital
Equity dilution + interest on debt portion
Dilution
Moderate dilution
Repayment
Fixed repayment
Stage fit
GrowingScalingMature

Best for

Established businesses that want patient capital without the maximum-pressure VC outcome.

Watch-outs

Highly regulated. Slower than typical PE close. Some SBICs have specific industry mandates.

Real talk

SBICs are the most underused capital source in the veteran ecosystem. Many are explicitly mandated to support small business and several have veteran-friendly histories.

Equity

Independent Sponsor / Searcher Capital

Capital structured around acquiring an existing business, not starting one.

Check size
$2M to $50M deals
Cost of capital
Equity to LPs + management equity carve-out
Dilution
High dilution
Repayment
Repaid at exit
Stage fit
Mature

Best for

Veterans buying a business, independent sponsor model, search funds, ETA paths.

Watch-outs

Capital is patient but governance is real. Operating partner expectations are explicit.

Real talk

If you are buying instead of building, this is the lane. The 'IS-friendly' filter on the Equity Providers directory is built for this exact path.

For veterans: A growing number of veteran-led independent sponsor groups exist. Talk to Jary at Thurion before going wide on outreach.