What the owner will do with the decision the money postpones

When an owner talks about raising capital, the first thing I ask is what he will do with the decision the money postpones.

New money has only two functions: becoming debt or becoming growth.

Used as cash flow in a stressed cash position, it increases the debt. It pays the month, the decision stays the same, and the owner spends the card he was saving for the hard moment.

Used to buy something that generates new money, it becomes growth. And growth pays the debt and still perpetuates itself.

The choice is between stretching the debt and perpetuating the capital.

I work alongside funds, lawyers and accountants. For those who lend or invest, what weighs is not the size of the cheque. It is knowing who decides what to do with it.

That is why, in my work, the diagnosis comes before the money, never after.

Three questions I ask before any conversation about new money:

1. Was the operation profitable before the debt?
2. Does the owner accept control over the money coming in?
3. Which decision will the capital make possible, and which will it allow to be postponed?

Whoever answers all three without hesitating is ready for the money. Whoever stalls on the third needs to decide before raising.

With the money your company is looking for today, will you dig the hole or fill it?