The Case for Patient Capital
At some point, a growing business will face two scaling options.
Either double down on the sales/business development side or look for some capital to help with that growth. Very often, people don’t realise the options that are available to them.
However, there are other options if people take a moment to see what is out there. Patient capital, if you will.
Walk with me.
In the main, venture capital (VC) and private equity (PE) dominate the headlines. Founders are celebrated for massive funding rounds, unicorn valuations, and high-profile exits. The narrative is all too seductive. Get funded fast, scale aggressively, exit quickly.
But beneath the glossy surface lies a far more complex and, for many, exclusionary reality.
The venture capital model is built on pattern matching, which often means playing into a plethora of biases. Especially in the US and UK, investors look for certain types of founders, typically white, male, and from a top-selective university, working in industries already validated by previous success stories.
This has real consequences that many others have shared before me.
Less than 2% of VC funding goes to Black founders.
Less than 3% goes to women-led startups (even lower when intersecting race and gender).
The failure rate is built in. 7 to 9 out of 10 VC-backed companies fail.
Private equity offers no safer path. While it often arrives dressed in the language of “value creation,” it’s not uncommon for these deals to leave businesses saddled with unsustainable debt, cost-cutting mandates, and pressure to exit quickly regardless of the long-term wellbeing of the business.
Of course, these work for some models, but for the majority of businesses it can bring challenges.
For founders chasing these forms of capital, the hidden costs often include the following.
Loss of control Investors may demand significant equity and board influence. I have seen way too many stories of founders ousted from their own companies because the ones with the cheque wielded way too much power. On the flip side, there are issues such as dilution over funding rounds or the issues of preference shares, which, when liquidated on a sale or new round, always lean toward the investor
Aggressive growth pressure There is a huge assumption that scaling has to be done fast, or you will fail. This assumption is that you always have to build a moat, essentially a competitive advantage over other organisations that will give you above average returns. You notice this in countless pitch decks where founders suggest their business or business model is disruptive.
Short-term expectations The notion that a five to seven-year ROI window is the norm. For some capital investors, the window is even smaller. This often has a downside on how leaders make strategic decisions. Scaling the business can easily get plagued by bad decisions as the executives focus more on the expectations of these founders than the long-term growth of the business.
Cultural misalignment Founders who want to build community-rooted or sustainable companies are often misaligned with investor expectations. Many business leaders wish to develop teams, impact communities and work with a more purpose-driven attitude than just thinking about the return on investment.
These aren’t just funding decisions, they are identity decisions. Developing a corporate identity is often shaped by several factors both within and without the organisation, but if it is dominated by one voice, then we know where this can end up.
So let’s explore the case for patient capital where the focus is on long-term, flexible financing that prioritises shared success, not quick returns.
Some years ago, I came across the book Adventure Finance by Aunnie Patton Power. In this treasured book in my library, I explored how founders today have far more options than the traditional VC/PE route. Allow me to share some of these with you.
Revenue Based Financing (RBF)
RBF is a flexible alternative to traditional equity or loans. Instead of giving up equity or making fixed monthly repayments, you agree to pay investors a percentage of your monthly revenue until a predetermined return cap (usually 1.5x–3x the original investment) is met.
Use Case.
Payments scale with your income, so if you have a slower month, you pay less.
You retain ownership and control—no dilution of equity.
Ideal for companies with predictable revenue or subscription models.
This model has been used many different kinds of businesses, including SaaS (software as a service), DTC (direct-to-consumer) brands, and social enterprises wanting flexibility without equity loss.
Equity Crowdfunding
Equity crowdfunding allows everyday people, who will be your fans, customers, and early supporters, to invest in your company in exchange for shares. Instead of a few large investors, you raise small amounts from many, typically via a regulated platform.
Use Case.
Turns your audience into shareholders who have a vested interest in your success.
Diversifies your investor base and democratises access to funding.
Particularly powerful for mission driven or community focused brands.
This model has been used by food & drink brands, health tech, green energy startups, and underrepresented founders looking to bypass traditional gatekeepers.
Convertible Notes & SAFE agreements
Convertible notes and SAFEs (Simple Agreements for Future Equity) are early-stage funding tools that allow startups to raise money without needing to set a valuation right away. Instead, the investment converts to equity later, usually at a discount or with a valuation cap.
Use Case.
Ideal for early-stage companies that don’t yet have firm valuations.
Keeps the fundraising process simple, fast, and founder-friendly.
Gives you time to build traction before formalizing investor ownership.
This is a model used in incubators targeted at startups in the ideation, prototype, or pre-revenue stage that expect to raise a priced round later than those scaling.
Angel Investment
Angel investors are typically high-net-worth individuals who invest their own money in early-stage businesses in exchange for equity. Many are seasoned entrepreneurs themselves, offering not just funding but mentorship, networks, and strategic support.
Use Case
Angels can be mission-aligned and emotionally invested in your success.
Deals can be more flexible and founder-friendly than VC.
Particularly impactful for founders in underserved or overlooked sectors.
This is ideal for entrepreneurs looking for smaller ticket sizes (£10K–£500K) and advisory-rich relationships.
Special Purpose Vehicles (SPVs)
SPVs are pooled investment vehicles, often created by a group of angel investors, friends and family, or community members to collectively invest in a single company. They provide a way to gather multiple backers under one cap table* entry.
Use Case
Makes it easier to manage many small investors.
Allows values-aligned collectives to back founders they believe in.
Great for founders who want community ownership without complexity.
This can be used by creators, local businesses, and underrepresented founders, especially those activating a loyal audience or affinity network.
Inclusive Lending & CDFIs
Community Development Financial Institutions (CDFIs) are mission-driven lenders that provide loans and financial services to underserved individuals and communities, including small businesses often overlooked by big banks. In the UK Fredericks Foundation and Big Issue Invest are great examples of this. In the US there are Opportunity Finance Network (OFN) and Accion Opportunity Fund
Use Case
Loans are tailored to businesses with nontraditional profiles or credit histories.
Often paired with training, support, and technical assistance.
Enables business growth without giving up ownership.
This is one of the last resort options I would recommend to small businesses in rural areas, women-led companies, Black and Brown founders, and social enterprises. Not in a negative way, but if the other options are exhausted, this is a powerful alternative.
These models offer funding without the high pressure and unreasonable urgency of the VC/PE treadmill. They support steady growth, founder ownership, and long-term value creation.
Patient capital should be treated like a pension, a bond, or a trust fund. As a vehicle for long-term wealth creation that compounds over time.
Instead of fueling the extractive speed of hyper-growth, it supports:
Sustainable, people-first businesses
Economic inclusion for historically excluded founders
Aligned values between capital providers and business owners
Healthier local economies and ecosystems
It’s time to reimagine capital not as a casino chip but as a commitment. As stewardship. As solidarity.
Venture capital and private equity have their place, but they’re not the only way to build.
We need to normalize capital that’s committed, not extractive.
Capital that enables purpose, not just profit.
Capital that lets you build at your own pace, not on someone else’s clock.
Let’s make the case for patient capital not just as an alternative, but as the foundation for a fairer, more sustainable economy.
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*Cap Table - A capitalization table is a document that details a company's ownership structure, outlining who owns what shares and the value of those shares.
Resources
Here are some useful starting points if you’re curious about patient and inclusive capital:
Adventure Finance – adventurefinancebook.com
Zebras Unite – zebrasunite.coop
Angels of Impact – angelsofimpact.com
Seedrs / Crowdcube – UK-based equity crowdfunding platforms
Community Development Financial Institutions (CDFIs) – Equitable, community-focused lenders
If you are looking for a coach to help scale your business then contact me.
