How to Structure Capital for Growth Without Killing Profitability

Growth is exciting, but if your capital structure isn't built right, it can quietly erode your margins and leave you with a bloated business and stressed-out balance sheet.

The Common Trap

Many businesses raise capital too quickly, too expensively, or in the wrong form. They chase scale with high interest debt or premature equity dilution, all without a clear view of return on invested capital (ROIC). The result? Revenue may grow but profitability stalls or disappears.

A Smarter Strategy

Here's how to grow strategically:

• Match the capital type to the growth phase: Use equity for long-term bets, debt for predictable, cash-generating investments.
• Layer your capital stack: Blend term loans, mezzanine debt, or seller financing to preserve equity while keeping payments manageable.
• Forecast profitability first: Always model how each dollar of capital impacts your net margin and EBITDA, not just top-line growth.

Bottom Line

Growth capital should be fuel, not fire. Structure it to enhance, not erode, profitability, or you'll find yourself running a bigger, poorer business.

Capital should create leverage, not dependency. If you’d like a confidential perspective on optimizing your structure for growth and resilience, we’d be happy to connect.