Bootstrapped to over $100M in revenue, SendCutSend provides custom-machined parts. Its advantage isn't just cost, but speed and a simple software interface for engineers to upload designs—a focus on user experience that traditional manufacturing shops lack.

For projects requiring hundreds of millions, fundraising should be split into phases. The initial "pre-industrialization" phase, focused on proving technology, is suited for venture capital. Later phases for manufacturing and scaling should target project finance structures with debt/equity combinations and strategic partners.

Unlike the asset-light software era dominated by venture equity, the current AI and defense tech cycle is asset-heavy, requiring massive capital for hardware and infrastructure. This fundamental shift makes private credit a necessary financing tool for growth companies, forcing a mental model change away from Silicon Valley's traditional debt aversion.

Corporations are increasingly shifting from asset-heavy to capital-light models, often through complex transactions like sale-leasebacks. This strategic trend creates bespoke financing needs that are better served by the flexible solutions of private credit providers than by rigid public markets.

Bootstrapped companies hire to support existing revenue. In contrast, venture-funded companies hire ahead of the curve for future growth. Mandia's new company hired go-to-market professionals before the product was even released—a move impossible in a self-funded model focused on immediate profitability.

There's a critical financing gap for early-stage hardware companies. Venture debt firms avoid CapEx-heavy, unprofitable startups, while traditional banks require positive cash flow. This forces founders to either dilute themselves with expensive equity for equipment or risk their personal assets.

For asset-heavy hard tech companies, debt is most effective not as a bridge to the next equity round, but to finance long-lived assets (e.g., machinery) that are directly tied to contracted revenue. This approach de-risks the loan and supports scalable growth without excessive equity dilution, a sharp contrast to SaaS venture debt norms.

Unlike traditional capital-intensive industries, OpenAI's model is asset-light; it rents, rather than owns, its most expensive components like chips. This lack of collateral, combined with its cash-burning operations, makes traditional debt financing impossible. It is therefore forced to raise massive, dilutive equity rounds to fund its ambitious growth.

Startups in capital-intensive sectors like defense don't need to rely solely on venture equity to build factories. A large government contract can be leveraged to secure significant project financing from other financial partners, preserving equity for R&D and growth.