We're in agreement but how would you suggest structuring $5M as just debt? Assume the company is small with negative cash flow and an existing line of credit from receivables. I've seen more of a debt & equity mixture. I encourage you to give your perspective. I'm just one person with just my experiences. My way certainly isn't the only way and most likely isn't the best way. It's fun because there's always something new to learn.
I've been trying to give the 30,000 foot view without getting into the details to limit confusion. I've skipped debt as financing but it's really important. In addition, many companies that I see have existing debt and stock structures that have to be fixed to move forward. I haven't talked about how best to structure your company for sale later on (C vs S vs LLC, keeping it clean, basis step-down, agreements for key employees).
One big area is scalability. I don't know how may times I'm pitched an idea from an existing company that wants to grow. They give a presentation about doubling the size of this group, tripling the size of the sales team etc. They don't add in the management overhead needed for these new hires. They underestimate how long it will take to get them up to speed and how much disruption to the existing workforce training will take. They don't know how ready the existing employees are to take on management roles. Some of the smaller companies need to learn about EEOC rules as you get larger. Evaluating how a company can really scale up is a big part of determining a good vs bad investment.