Growth credit, or venture debt is a form of non-dilutive capital designed to help businesses scale without giving up equity. Unlike traditional equity funding, it’s underpinned by a company’s financial fundamentals and future cash flow potential.
In this article, we explore practical scenarios where growth credit can offer a strategic advantage.
Fund Strategic Acquisitions
Acquiring a complementary, cash-flow-positive business can be a smart way to grow—especially if it adds recurring revenue, improves margins, or opens up cross-sell opportunities. When the deal is accretive and integration is low-risk, the upside is clear.
Using structured debt to fund the purchase lets you preserve ownership while aligning repayments with new cash flow from the acquired business. Compared to raising equity—where valuation is usually based on your business before the acquisition—debt can be a cheaper and more strategic option. If you’re confident the acquisition will create value, why give up equity priced on your current state, instead of funding growth through future returns?
Take Spacer Technologies as an example. We’ve provided capital to support Spacer’s acquisition strategy, targeting peer-to-peer platforms across parking, storage, and carpooling to expand its footprint in the alternative mobility space. Last year, Spacer acquired Scoop Commute—a leading enterprise carpooling SaaS used by Fortune 100 companies across the U.S.
By using structured credit, Spacer has been able to fund strategic acquisitions that strengthen its market position—without diluting equity or ceding control.
Inventory Financing
If your business has clear demand and strong sell-through rates, tying up working capital in stock can limit growth. Growth credit allows you to purchase inventory ahead of sales cycles, smoothing out cash flow without giving up equity. The cost of debt is predictable, and when inventory turnover is reliable, you can confidently model the margin and payback.
In contrast, using equity to fund inventory—which is essentially short-term working capital—means giving up a long-term stake in your business to cover a short-term need.
Bridge to a Future Equity Round
Growth credit can also act as a bridge to a future equity raise—buying time to hit key milestones, improve metrics, or hold for better market conditions. Rather than raising equity prematurely (often at a lower valuation), operators can use structured debt to extend their runway and increase negotiating power.
This approach works well when the business has strong revenue visibility and a clear plan for deploying the funds. The cost of capital is known, and if the debt is used to drive measurable growth—like increasing ARR, reducing churn, or improving margins—it can materially improve the outcome of the next equity round.
WeMoney, Australia's #1 financial wellness platform, recently used a $1 million credit facility from Mighty to optimise its capital structure ahead of an equity raise — successfully securing $12 million in funding in April 2025. It’s an example of how well-timed credit can help founders reach key milestones and approach an equity raise from a position of strength—without taking on unnecessary dilution.
Fund Key Hires
Growth credit can also be a useful tool to fund key hires—particularly in sales and product development—when the return on investment is clear. For sales roles, if your hiring plan is tied to a quota model with known ramp-up and payback periods, debt can help you accelerate headcount without waiting for revenue to catch up.
Similarly, if you’re investing in engineering or tech to unlock specific features or improvements tied to monetisation or retention, financing that investment with growth credit allows you to move faster while preserving working capital. In both cases, the returns from these hires can be modelled and tracked—making them well-suited to structured, short-to mid-term financing.
Take a look at this case study of how Termina, Australia’s leading auto-switching energy broker, utilised Mighty’s debt funding to expand its sales team - resulting in 50% growth in just 6 months, moving the business towards profitability.
Provide Liquidity for Early Shareholders
A lesser-known but valuable use case for growth credit is providing liquidity to early shareholders—without relying on a secondary sale. If the business has stable revenue and a clear growth trajectory, debt can be used to return capital to early shareholders directly. Unlike secondaries, which depend on finding a buyer (often at a discount), growth credit offers a structured, predictable way for the business to fund the buyback itself—without impacting the cap table.
Summary
One of the key benefits of growth credit is flexibility. It can be used to fund a wide range of business initiatives.
If you’re interested in how growth credit could support your specific business needs, schedule a call with our Mighty's Investment Manager, Luka.
