Part 2: Using Radars To Finance the In-betweens
Below is Part two in a 2 part series: Post 1 tears down the old modeling culture and rebuilds it through modeled risk mapping not fixed cells; Post 2 builds the funding vehicle that the new risk map makes possible.
The Goldilocks‑Zone Problem
Picture the hypothetical company LeafForge, a decade old European start‑up that grows lettuce in glass chambers run by robots and clever ML software. The gross margins are profitable and grocers want the product enough to sign long term contracts. The next step is to copy the pilot plant into the Middle East, where greens are flown in by jet and night‑time power is cheap.
LeafForge needs roughly $35 million not to build factories but of fresh equity to keep hiring plant scientists, finish its control software and ride out cash burn until the first Gulf factory throws off profit.
Venture funds flinch: “too much hardware after the vertical‑farm blow‑ups.”
Infrastructure funds shrug: “check size too small, tech too new, cash flows not big enough.”
Family offices like the mission but don’t want the whole risk on their own.
Excel forecasts, built to look “conservative,” pin power at today’s price, assume robots stay expensive and treat interest rates as flat. Investors sense a guess and pass or don’t even bother to get past the first slide in the deck.. The raise is marooned between silos.
Switching on the “what‑really‑moves‑the‑needle” engine
Instead of building a new spreadsheet for diligence we run LeafForge through the bottom‑up model described in Part 1. Three numbers move almost everything:
Electricity prices in the Gulf.
Cost of Siemens robots in euros.
Short‑term euro interest rates.
The same model also shows public‑market tickers that move the other way:
Utility shares usually rise when power tariffs jump.
Siemens stock benefits when factory gear is in hot demand.
A simple interest‑rate swap turns floating loan payments into a fixed bill.
The idea clicks: why not bundle the private lettuce equity with small positions in these familiar public assets? Price the risks where they already trade—inside the same vehicle that needs the money.
Building one wrapper that broader money understands
One way to solve this problem is to change what you are investing in through a multi-asset wrapper. Instead of selling steak, build and sell a carne asada burrito. Multi‑asset wrappers aren’t new. Commodity traders have long tucked freight futures into shipping deals, and real‑estate funds sometimes pair REIT shares with a ground‑lease. But almost no one has pointed that lens at mid‑ticket private‑market assets: the $30‑ to $100‑million slivers that are too mature for seed money and too quirky for infrastructure buy‑outs. That gap matters, because most climate and industrial technologies live right there.
Our thought‑experiment pushes the familiar wrapper concept into this under‑served zone:
Start with the private asset that is awkward to get funded in a straight equity round.
Add only the liquid pieces that the same Monte‑Carlo model says drive (and hedge) the real risk.
Keep everything simple enough that a family office, a public‑pension overlay desk, and an infra‑credit sleeve can all recognize their part.
Here’s the simple structure.
Preferred equity in LeafForge – about $35 m: Carries the real upside when more plants come online, and pays out when the firm sells.
Fixed‑rate loan to the plant – roughly $30 m: Steady coupon funded by the factory operations once they are running.
Hedge sleeve – roughly $35 m
Long a liquid European utility ETF: power up, ETF up.
Low‑cost collar on Siemens stock: robot prices up, Siemens up.
Five‑year interest‑rate swap: floating loan now fixed
All of this sits in one Delaware‑LLC. One subscription form. One cash waterfall. Nothing exotic.
Modeled effect (round numbers).
Worst‑case IRR (the scary end of the curve) almost doubles—from about 4 % to 9 %.
Cost of capital drops by roughly three percentage points.
Because the left‑tail risk is now clear and limited, a mix of family‑office money and long‑only asset‑allocators happily fill the whole cheque, and the round closes.
Once you accept that framing, scaling stops being a legal nightmare and becomes a Lego exercise. Here’s how it unfolds:
Single deal + hedge – LeafForge alone, wrapped with utility shares, a Siemens collar, and a plain interest‑rate swap. Risk is tamed; equity gets runway.
Thematic basket SPV – Fold LeafForge together with a mushroom‑substrate recycler and a drone‑spray firm. Shared macro driver (energy + food volatility) means one hedge sleeve still covers most of the risk. Ticket grows to roughly $200 million, but investors see a clear, diversified story.
Manager‑level portfolio – Repeat across a few sectors. Because every deal is built on the same model, you can see in one dashboard how a spike in power prices hurts one asset but helps another, and adjust without hiring more lawyers.
By anchoring the idea in tools allocators already know, then showing how that same logic stacks neatly from one asset to many, the SPV stops looking like clever finance and starts looking like the natural next step in private‑market evolution.
Why this wrapper could draw new money—and still unsettle the old silos
Imagine the deck for SaladWrapper LLC landing on a family-office principal’s desk. He had written off LeafForge when it looked like pure hardware risk, but now he spots a European utility ETF he already monitors each morning. In one glance the scary power bill ties to a ticker he prices daily. The risk feels measured, not mystical, and the cheque he is willing to write suddenly doubles.
Picture a deputy CIO at a public pension reading the same term sheet. The preferred equity and fixed-rate plant loan slot neatly into her real-asset sleeve, while the ETF and Siemens collar fit under the liquid-overlay programme her board approved last year. No mandate change, no side-letter gymnastics. For her the allocation feels procedural rather than adventurous.
Even a commodity desk at a global macro fund pauses. They live in power spreads but rarely touch private deals. Here their core trade sits beside a growth stake they could never reach. Because the hedge works in their native language, carving out a ticket is an easy internal sell.
That is the upside. The flip side is just as real. A venture investor flipping through the deck might ask why any part of the cheque is tied up in listed stocks. An infrastructure lender could wonder why a plant it might one-day finance is sharing a vehicle with an equity collar. The silos still see the world through their own lenses.
This is where the distribution engine earns its keep. By showing every party the same probability cloud—one that links power prices, robot costs and interest rates to both plant cash flow and hedge pay-offs—the model turns confusion into a shared map. Friction does not disappear, but it becomes productive. Questions shift from “Why is that ETF here?” to “Does the hedge sizing really cap my tail risk?” Once every player can see how the pieces move together, the wrapper stops feeling like compromise and starts reading like design.
Beyond hedging: liquidity and extra upside
Want to free up cash early? Sell a one‑year forward on the utility index and book part of your IRR while keeping the private shares. Want more upside on the same climate‑food theme? Add a coffee‑volatility sleeve—long arabica futures, short a café‑chain stock, small growth cheque in a lab‑grown‑coffee start‑up—all tracked in the same risk chart. Same wrapper, richer toolkit.
Take‑away
Private deals stall when each risk sits in its own echo‑chamber. Bundle the private upside with small, liquid positions that already price the big risks and you create a single, understandable product. The company gets money long enough to matter; investors get a mix of growth, yield and daily‑priced hedges that feels safe enough to buy.
Next time someone says your raise is “too risky for infra, too chunky for venture,” widen the wrapper instead of shrinking the ask—and let the market price reality, not fear.
