Instead of raising dilutive equity, RealDefense uses debt to acquire companies. Lenders base the loan amount (typically 2-4x EBITDA) on the combined EBITDA of both the acquiring and target companies, allowing the business to fund growth while founders retain ownership.

Serial acquirer Lifco improves post-acquisition performance by having sellers retain an ownership stake in their business. This goes beyond typical earn-outs, keeping the founder's expertise and incentives aligned with the parent company for long-term growth, rather than just hitting short-term targets.

Instead of traditional stock options that dilute shareholders, Lifco uses a synthetic option program personally backed by founder Carl Bennett's own shares. Executives are granted options exercisable in 2030, tying compensation directly to long-term stock performance while ensuring non-founder shareholders are not diluted.

SpaceX gives coding AI company Cursor compute and a $10B payout if an acquisition fails, while securing an option to buy a state-of-the-art model. This innovative structure de-risks capital-intensive R&D for the startup and provides the acquirer with a low-cost call option on breakthrough technology.

To provide non-recourse financing, the firm structures the deal not as a loan but as a co-investment in a new LLC. The customer contributes common equity (first-loss capital), while the firm's financing is preferred equity. This legally shields the investor's personal assets and makes the capital non-callable.

Thinking about leverage as simply "on" or "off" is limiting. A more advanced approach views any asset with a lower expected return as a potential liability. One can effectively "borrow" it (i.e., short it) to finance the purchase of an asset with a higher expected return, aiming to capture the spread.

In its acquisition of Bluejay, Mirum employed a creative deal structure combining stock and cash. The stock component ensures Bluejay's shareholders remain invested in the asset's success, while sales milestones de-risk the acquisition for Mirum and allow the selling team to share in future upside, creating a win-win partnership.

Lifco structures deals with a put/call option system. Sellers get a put option to sell remaining shares at a price tied to future earnings, incentivizing growth. Simultaneously, Lifco holds a call option to buy those shares. This clever structure aligns long-term interests and ensures 100% ownership without diluting existing shareholders.

SpaceX is paying AI coding company Cursor $10B for a partnership that includes a call option to acquire them for $60B. This "try before you buy" M&A structure minimizes risk while securing a potential future discount on a high-growth asset.