Chika Ezii@EziiChika
Mark, so I went to work with your mezzanine financing insight, and it transformed the conversation for us.
We explored the model today with a serious prospect for a $30k seed. The discussion flowed far smoother than our previous equity or debt conversations, and I will use what we are building to elaborate a bit.
Mezzanine financing is perfect hybrid:
Debt-like priority returns + equity upside.
We realised it perfectly fits where we are with Block & Co. at the moment:
• Early-stage (valuation still fluid)
• Asset-backed (4,000 sqm land play)
• Real cash-flow potential (daily footprints + residency model)
• Preparing for larger capital unlock while deliberately building toward our vision of evolving the ecosystem into a home-grown VC that raises and deploys capital to fund high-potential founders from within.
Structure we tested (Convertible Revenue Share - Mezzanine Style):
Phase 1: Capital Injection - $30K (~N40M)
Phase 2: Monthly Revenue Share - targeted 1.5x - 2x return paid from actual cash flow
Phase 3: Conversion Option - investor can exit cleanly or convert into a small equity stake (5 - 10%).
With this model, we were able to conclude that beyond shared benefits, it helps protect founders by avoiding giving away too much equity too early while giving the investor immediate visibility on returns. Exactly the creative African approach you described.
I am grateful for the gem, as we are integrating it into our playbook.
Will you find time to suggest any refinements, esp. for founders in similar asset-backed, cash-flow-positive stages?