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Why I reject most private debt deals
I reviewed ~25 opportunities this week.
Only 2 were worth sending to investors.
Not because of returns.
Because most of them break on very basic points.
1. Repayment is not clear
A lot of deals say things like:
- “we’ll grow fast”
- “next round will refinance”
- “pipeline is strong”
That’s not repayment.
It looked good on paper, but once you dig → no clear cash event.
2. Sponsor risk is underestimated
People focus too much on the numbers.
In reality, the deal = the operator.
→ good margins
→ decent business
→ but weak execution
That’s where things break.
3. Structure is weak
No collateral
No real protection
Loose terms
At that point, you’re not doing private debt.
You’re taking equity risk without the upside.
What actually passes
Very few deals:
- short duration (ideally <9 months)
- clear repayment (contract, receivable, inventory cycle)
- simple structure
- downside you can explain in 2 minutes
Most of these never hit platforms.
They get allocated privately.
I usually match them with a small number of investors.
We’re starting to see more of these opportunities becoming accessible through new distribution models, but it’s still early.
If you look at similar situations, feel free to reach out
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