Same Deal, Different Conditions
The same company. Different conditions moved, one at a time, both ways.
An illustrative deal returns three times the money when every condition holds. Leave the business untouched, move even one condition, and the same deal does better or worse in return, anywhere from a loss to far more, on the conditions alone.
Base deal: buy at 8×, grow earnings 100 to 200, sell at 8× = 1,600, repay 400 debt. Equity puts in 400, gets 1,200 back = 3×.
All figures are money in the same units. Return = equity out ÷ equity in, both after debt. Each card shows the formula, then fills in the one value that changed.
condition weaker, deal does worse
condition stronger, deal does better
F = field condition · read from the world the deal runs in | H = funder condition · read from who holds it
F1
Debt access
formula
return = (1,600 − debt) ÷ (800 − debt)
no debt · equity funds all 800
(1,600 − 0) ÷ (800 − 0) = 2×
cheap debt 600 · equity funds 200
(1,600 − 600) ÷ (800 − 600) = 5×
Debt magnifies the return. More debt means a smaller cheque rides the same growth higher; none means equity carries the whole price.
F2
Funding continuity
formula
return = (1,200 × your share) ÷ 400
none arrives · punishing rescue, diluted to a quarter
(1,200 × 25%) ÷ 400 = 0.75× · a loss
money arrives · stake intact, build finishes
(1,200 × 100%) ÷ 400 = 3×
Continuity holding is just the base deal. When fresh capital stops, a rescue round takes part of the company, and a harsh enough one means you don't get your money back. The one condition where the asset itself can fail.
F3
Exit depth
formula
return = (200 × sale multiple − 400) ÷ 400
sell at 6× · fewer buyers
(200 × 6 − 400) ÷ 400 = 2×
sell at 10× · hot market
(200 × 10 − 400) ÷ 400 = 4×
The sale price is earnings times the exit multiple. More buyers lift the multiple and shorten the wait; fewer push it down.
F4
Asset density
formula
return = 1,200 ÷ (price − 400 debt)
price = earnings 100 × entry multiple · debt held flat at 400
pay 11× · price 1,100, equity in 700
1,200 ÷ (1,100 − 400) = 1.7×
pay 6× · price 600, equity in 200
1,200 ÷ (600 − 400) = 6×
The entry price is set by competition. Too much money chasing too few targets bids it up; plenty of targets lets you buy cheap. Debt held flat, so part of this swing is the extra leverage that adds, not the lower price alone.
F5
Intermediation depth
scale, not return · helps the program, not this deal
A deep market lets one team run many deals cheaply; a thin one means hiring everything in-house. It changes how many deals you can run, not this one's number.
F6
Enforceability
formula
return = (1,200 × collected) ÷ 400
collect 60% · rights leak
(1,200 × 60%) ÷ 400 = 1.8×
collect 100% · rights hold
(1,200 × 100%) ÷ 400 = 3×
The proceeds are only what you can actually collect. If rights do not hold up, value leaks and money is stuck.
H1
The clock
formula
return = (earnings × 8 − 400) ÷ 400
sell year 2 · earnings only 150
(150 × 8 − 400) ÷ 400 = 2×
wait to year 5 · earnings reach 230
(230 × 8 − 400) ÷ 400 = 3.6×
Sell early to meet the funder's deadline and earnings are only part-grown; patient money lets them build before the sale.
H2
Objectives
3× either way · nothing in the numbers moves
The funder may want something the return never counted, and act on it. The one condition you cannot see in the result, because it changes the goal, not the number.