A founder I know raised what he described as a venture round last year. Eight million dollars, growth stage, a name-brand lender on the term sheet. He told everyone he’d raised a Series B. When I looked at the actual terms, most of it was debt. A venture debt facility with warrants attached, structured to look and feel like equity in the room but to behave like a loan on the balance sheet.

He didn’t fully understand the difference until twelve months later, when the facility’s covenants started constraining decisions he assumed were his to make.

I’ve watched a version of this happen enough times now that I think it’s the most important under-discussed shift in how companies actually get funded. The instrument has been changing underneath founders for three years. The conversation, the press coverage, and most founder education are still built around equity. The money increasingly is not.

This piece is about that shift — what’s actually happening, why it’s happening, and what it costs the founders who raise on the new instrument without understanding that the instrument has changed.

For most of the last venture decade, the default growth-stage instrument was equity. A company raised a priced round. Investors took ownership. The cap table got more crowded, the valuation went up, and everyone’s incentive was aligned around the same thing — the eventual exit. Debt existed at the edges, used by a small number of sophisticated founders for specific purposes, but it was not the default. Equity was the default, and the entire founder playbook was built around it.

That has been changing, quietly, since roughly 2022. And the change is structural, not cyclical.

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A founder I know raised a Series B last year. Good round, good lead, clean terms. Eighteen months later the company is in real trouble — not because of any one bad call, but because nobody in the company can tell you how decisions actually get made. Including the founder.

I have been thinking about why this is so common.

The honest answer is that Most companies don’t have a decision system.
They have a meeting calendar. And they mistake one for the other. The mistake is invisible at fifty people. It gets expensive at two hundred. By five hundred, it has usually killed the company, though it takes another two years for anyone to admit that’s what happened.

This Briefing is the first of three on the problem. The framework today. The diagnostic next week. The hardest version — what to do when you inherit a company that has been running without a decision system for years — the week after.

The literature on decisions is mostly about the wrong thing. RAPID, RACI, DACI, the Bezos memos, every framework you’ve read in the last decade. They all focus on the moment a decision gets made. Who decides. Who gets consulted. How it’s documented.

But by the time a question reaches the room where it gets decided, the decision is already mostly made. It was shaped by what information got gathered, by who got invited into the conversation, by the framing the question arrived with, by the prior decisions whose unexamined assumptions are quietly setting the boundaries of the new one. The room ratifies. It does not really decide.

So the leverage isn’t in the moment of decision. It’s in the architecture upstream of it. And that architecture has four parts.

The first is what I think of as a question filter. Companies are constantly being asked things that look like decisions but aren’t. Should we hire this person, should we open this market, should we change pricing, should we acquire this competitor. Some of these are real. Most are operational adjustments that look strategic because the person raising them is senior. Without a filter, the company spends its decision energy on the wrong questions and arrives at the consequential ones too tired to think clearly.

The second is a framing standard. Once a question is real, how it’s framed determines what answer is even possible. “Should we raise prices” and “what are we leaving on the table” are the same question, but they will produce different companies. Most companies inherit framing from whoever raised the question first. This is a polite way of saying that the most articulate person in the room sets the answer before the analysis starts.

The third is an evidence threshold. Different decisions deserve different rigour. A reversible bet with low cost can be made on instinct. A non-reversible bet with high cost demands structured evidence and someone explicitly arguing the other side. Bezos was half right about this — Type 1 versus Type 2 — but the framework needs more than two categories to work in practice. Companies without an evidence threshold either over-deliberate the small stuff to the point of paralysis, or under-deliberate the large stuff because the meeting culture treats every decision as roughly the same weight.

The fourth is a decision record. When a consequential decision gets made, something needs to be written down. Not a memo for circulation. A record. What was decided. What evidence supported it. What the dissenting view was. What would cause us to revisit it. Most companies make consequential decisions in conversations and Slack threads, and three months later nobody can remember what the company actually believed. When the decision turns out wrong, no one can reconstruct the reasoning, which means the company can’t learn from the mistake. Without records, experience doesn’t accumulate into intelligence. It just accumulates.

These four work together or not at all. A filter without framing wastes effort on well-framed wrong questions. Framing without evidence thresholds produces well-framed decisions on bad data. All three without a record means none of it compounds. You need the whole system or you have nothing.

Here’s the part that took me years to see clearly.

The reason almost no company has this system is that the cost of not having it is invisible during exactly the period when installing it is cheapest. In the first fifty employees, the founder is the system. Every consequential decision passes through one head, and that head is holding the whole company in working memory. It works. Not because the founder is brilliant, but because the company is small enough to fit inside one person’s attention.

Between fifty and two hundred, the founder’s working memory stops being enough. But the consequences aren’t visible yet, because the company is still close enough that decisions can be made through informal channels — Slack, hallways, ad hoc calls. The system is undocumented and distributed but it mostly holds.

Between two hundred and five hundred, it breaks. Decisions get made in parts of the company the founder no longer sees. Framing drifts between teams. Evidence thresholds become whatever each team’s lead happens to use. There are no records. Every individual decision still feels carefully made, but the company as a whole has stopped learning from its own pattern. The board starts noticing things are off. Hires that should have worked don’t. Strategy that should have shipped doesn’t. From the outside it looks like an execution problem or a leadership gap. It isn’t. It’s an architecture failure that started two years earlier and is only now surfacing.

This is the moment most growth-stage companies stall. Not from lack of capital or talent. From an absence they couldn’t see when they could still cheaply fix it.

The companies that get through are the ones who built the system before they needed it. Not because their founders were smarter, but because someone — sometimes the founder, sometimes a board member, occasionally a GP who’d been through this before — saw the absence early and made them install it.

That’s the framework. Naming the four parts is the easy bit. The hard work is making them actually run — what a question filter looks like on a Monday morning, what a framing standard does to your all-hands, how to set evidence thresholds without turning your company into a bureaucracy, what format a decision record takes that people will actually use. That’s what next Tuesday’s Briefing is about.

Part three is for the people who already know they have the problem. The companies that have been running without a system for years, where retrofitting one feels impossible. It isn’t. But it requires a different approach to the one you’d use if you were building from scratch, and almost no operator literature addresses it. I’ll write that one the Tuesday after next.

For Vantage members, the operational version of this — the Board Decision Upgrade — is one of the intelligence products inside Vantage when it launches end of June. Membership starts at £99 per year. Pro is £400 per year for founders mid-raise and emerging LPs evaluating fund commitments. Founding member pricing is locked permanently — the window closes 12 July.

If this resonates, the most useful thing you can do is forward it to one founder, GP, or board member you know who is somewhere in that two-hundred-to-five-hundred stretch. They’re the ones this is written for, and they almost certainly haven’t seen the problem yet.

Ben Botes is GP at CGRPE, MD of Caban Group, and the author of Unstoppable Growth (Amazon bestseller). Four founder exits including StartMe, Africa’s first crowdfunding platform, built in 2012. ScaleSignals is read by 13,000 founders, LPs, and operators globally.

Next Tuesday — Part 2: how to diagnose which layer of your decision architecture is failing right now.

Vantage launches end of June. Membership £99/year. Pro £400/year. Founding member pricing locked permanently — window closes 12 July.

ScaleSignals is the GP intelligence platform for founders, LPs and operators making capital decisions where the standard playbook does not apply.

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Written by Ben Botes — GP at Caban Group, MD of CGRPE, four founder exits including StartMe (Africa’s first crowdfunding platform, 2012), Amazon bestselling author of Unstoppable Growth.

Read by 13,000+ founders, LPs and operators across Substack.

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