A guide for company owners and managers · Financing
How to finance company growth
A strategic overview of financing schemes — from bank loans through venture capital to hybrid instruments. Built for CEO-level decisions: when each makes sense, what it costs and what you give up.
This overview uses a simplified, single-level categorization — every scheme sits in one list as a “way to raise capital”. That is practical for decisions, but it conceptually mixes two different axes: WHO provides the money (angel, VC, PE, bank…) and HOW they provide it (priced equity, convertible, loan, leasing…). Angels and VCs, for instance, routinely invest through a convertible loan — so these are not three equivalent alternatives. Where it matters, the cards distinguish this WHO × HOW axis, and a dedicated section below untangles the whole relationship.
This guide was prepared by ROSTEON s.r.o. as an orientation resource for company owners and managers. It helps you get oriented quickly and does not replace legal, tax, accounting or investment advice. Always discuss specific decisions and structures with a qualified advisor who knows your situation.
The core axis: debt vs. equity
FrameworkEvery financing scheme can be placed on a spectrum. On one side, debt — you borrow, repay with interest, keep control. On the other, ownership (equity) — you give up a stake, don’t repay, but share future upside and decision-making. Hybrid instruments sit in between.
Not where do I get money, but which price am I willing to pay — cash (debt), stake and control (equity), or a slice of future revenue (hybrid). The choice should track the company’s stage, the predictability of cash-flow and whether you need only money or also a partner.
Scheme catalog
Click for detailTwo axes: WHO gives vs. HOW they give
BreakdownDecision matrix
Comparison| Scheme | Equity dilution | Cost of capital | Speed | Cash-flow burden | Suitable phase |
|---|---|---|---|---|---|
| Bank loan | Growth / stable | ||||
| Bonds | Mature / larger | ||||
| Leasing | Any | ||||
| Factoring | Growth with deferred payment | ||||
| Angel investor | Seed / early | ||||
| Venture capital (VC) | Growth / scaling | ||||
| Private equity (PE) | Mature / profitable | ||||
| Mezzanine financing | Growth / acquisition | ||||
| Convertible loan | Seed / bridge between rounds | ||||
| SAFE | Seed / early | ||||
| Revenue-based financing | Growth with revenue | ||||
| Grants and EU subsidies | Any (project-based) | ||||
| Bootstrapping / internal cash-flow | Any |
low medium high
Terms worth knowing
GlossaryCapitalization table
Who owns what share of the company. Every equity round changes it — track how your stake dilutes across rounds.
Dilution
The drop in your % stake when new shares are issued. Not always bad — a smaller slice of a bigger pie can be more.
Weighted average cost of capital
The average price of all your financing sources. A frame for whether an investment is worth it (return > WACC).
Financial leverage
Using debt to boost the return on equity. It magnifies gains and losses alike — a double-edged sword.
Covenant
A contractual condition on debt (e.g. a debt-to-EBITDA ratio). Breaching it gives the lender leverage or the right to call the loan.
Liquidation preference
The investor’s right to get their money back first on a sale. 1× is standard; higher multiples are unfavorable.
Runway
How many months the company survives at the current burn rate. It sets when and how much capital you must raise.
Working capital
Money tied up in operations (receivables, inventory minus payables). Factoring and overdrafts finance it.
Investor’s available capital
A fund’s deployed vs. available funds. It shapes how willingly and on what terms a VC/PE invests.
Sources and further reading
ReferencesThis overview draws on generally accepted principles of corporate finance and current market practice. Below are sources to verify and study each topic more deeply. Terms, rates and instrument availability vary by provider and over time — verify the current state before deciding.
HOW TO FINANCE COMPANY GROWTH · A GUIDE FOR COMPANY OWNERS AND MANAGERS · © ROSTEON s.r.o. · v1.0 — An orientation overview, not legal, tax or investment advice. Consult specific structures with a qualified advisor.