Firehose #158: 🍰 Capital stack. 🍰
In contrast to VC - where over the past 30 years of software, there’s been a circular “we shape our tools, and then they shape us” coevolution around how equity works - this hasn’t happened for debt yet. We haven’t figured out the right atomic unit
Alex Danco • Pipe It! Platforms, Funding, and the Future
Since deal sizes are so large in private equity, firms really can’t afford to write billion dollar checks every few months, so they use debt financing, the act of taking out a loan in order to purchase a company.