How to fund the hard future
Why we invested in Tangible
As our lives become more digital, it is easy to forget what the world actually runs on. Houses, streets, power grids, factories, vehicles, and data centers make modern life possible. These are physical systems that take years to build, require real capital to scale, and fail if they are not engineered properly.
This hardware is also the physical backbone of every piece of software, and every digital service we use, ultimately making up a huge chunk of our world economy. Even at the peak of tech spending cycles, global software and IT spending reaches only the low trillions each year, while the physical economy it depends on represents several times that level of activity. It’s also where some of the hardest future problems live: resource scarcity, overloaded electricity grids, and transportation systems that no longer scale. These systems must be rebuilt, upgraded, and expanded – now, not years from now.
Yet, the equity ecosystem today is optimized for software, and most hardware companies will never see the capital they need for their innovations. We hear daily about new AI models or software platforms raising hundreds of millions in funding. That focus makes sense. Software scales quickly and fits neatly into existing venture models. The problem is that teams building hard tech solutions are expected to operate under the same capital logic while tackling problems that are slower, riskier, and fundamentally asset-heavy. Recent proof points, such as Base or Crusoe, show that hardtech can hyperscale too when given conditions that fit their business model. Still, capital intensity is treated as a red flag, even when it is a prerequisite for the innovations we urgently need.
When physical problems meet software economics
Imagine an early hardtech team building a next-generation vehicle. Production lines, equipment, inventory, and infrastructure all need to be financed before revenue can catch up. Equity alone is rarely the right tool for that job. This is where debt capital, like loans or structured credit, comes in.
Finance experts predict that $68 Trillion of debt capital is required to fill the infrastructure gap by 2040. The good news: Private credit has been growing rapidly. The sector has slowly adopted more of a VC mindset, moving earlier, competing more actively for deals, and looking beyond traditional corporate borrowers.
But the incentive structure for debt is different than for equity. Smaller transactions are harder to make work with operational cost of diligence, monitoring, and reporting eating away the fixed margins. As a result, credit processes are rigid by design. They are optimized for large, late-stage companies with predictable assets and long track records, not for teams still figuring out how to manufacture something new at scale.
Why deals die even when capital is there
So, while in theory, there is enough money to fill the gap, in practice, smaller teams almost never get the capital that they need to succeed. Founding teams might have brilliant technical engineers, but rarely financial ones. If you are building the car of the future, you are usually deep in engineering problems, optimizing production, safety, reliability, and supply chains. You are not spending time learning about asset-backed lending or building reporting systems for institutional lenders.
Even when debt would clearly be the right tool, getting there often means months of back-and-forth through spreadsheets, PDFs, and complex requirements, with little clarity on what actually matters. And the work does not stop once a deal closes. Reporting, compliance, and ongoing data management land on small teams that are already stretched thin. Debt becomes something that technically works, but operationally doesn’t.
So, founders either accept crushing dilution, adopt capital products that don’t really match their business model, or stall altogether. None of these outcomes reflect a lack of ambition or technical quality. They reflect a capital stack that does not match the reality of building physical systems.
From the lender’s side, the friction looks different. Evaluating hardware businesses requires understanding asset lifecycles, production risks, and operational realities that do not fit neatly into standard credit models. Documentation requirements further narrow the funnel. At the end of the day, too many deals die in diligence.
CAPEX should not block a better future
Tangible co-founder William saw this pattern repeatedly, first while building tech companies and later while working in venture capital. Whenever funding conversations turned toward asset-heavy businesses, the answer was usually “no”. Even strong teams with real traction struggled to access non-dilutive capital that matched their needs. The capital existed, but the pathway did not.
William and his former colleague Sebastian teamed up with Aishwarya, whose background in investment banking and capital markets added the missing perspective. They shared the same conclusion: What the market lacks isn’t cash in the banks, but a connecting layer between builders and capital markets. They founded Tangible with a simple conviction: CAPEX should not block a better future.
Tangible gives hardtech teams a fast on-ramp to debt capital without needing them to become experts in finance. Combining intelligent technology with financial expertise, they bring such companies up to institutional standards in weeks, not months. Founders feed the platform with what they know best: what they are building, how it works, and how it scales in the real world. Tangible packages this information into the kind of reporting and documentation lenders expect.
Once the groundwork is in place, the platform enables precise matchmaking and efficient deal review. Deals move faster and have a higher likelihood of closing. Once the papers are signed, staying on top of things stays smooth. Reporting, data cleaning, and ongoing capital market operations become part of an AI-powered system, instead of living in fragile spreadsheets owned by the most finance-skilled team member. Debt becomes something a small team can manage, so they can focus on innovating the hard systems that keep our world running.
Tangible’s platform changes the lender’s economics as well. Operational costs drop and time to close shortens. That means bigger margins, even for smaller deals. An entire asset class that was previously too complex to touch becomes viable, delivering both financial returns and tangible real-world impact.
Meeting William, Sebastian, and Aishwarya, we found a team that shares our vision of wanting the “future sooner” by building the connecting layer that capital markets have been missing for a long time. We are excited to back the team, and to see which technologies stand to scale once this financing hurdle is removed.