Originally appeared in TechCrunch. Coauthored with David Teten, Founder at Versatile VC (https://versatilevc.com/). More of his writing can be found at Teten.com.

Originally appeared in TechCrunch. Coauthored with David Teten, Founder at Versatile VC (https://versatilevc.com/). Read more of his work at Teten.com.

81% of entrepreneurs are unserved by traditional capital markets.

According to the Kauffman Foundation, 1% of companies in America raise venture capital and 18% use bank loans.

Sure, some companies will never need any outside funding–true bootstrappers. And more power to them. The rest are stuck, unfunded, in Capital Purgatory. The “debt-equity chasm.”

We’re betting there are a lot of founders within the 81% who would do some pretty amazing things if they had access to risk capital.

We, the Greater Colorado Venture Fund, have found these founders in all corners of our state.

We’re not the first people to think of how to fund the 81% of companies in the debt-equity chasm.

Mezzanine financing often utilizes a combination of funding mechanisms for mid-market companies. Impact investors have been creatively providing risk capital to companies for years. Investors and founders will be problem-solving to get the right capital to the right ideas forever.

About a year ago, we held the Alternative Capital Summit in Denver, CO. The event birthed helpful direction for the plight of the 81% of founders who are left behind by the debt-equity paradigm.

For many companies, capitalizing on an opportunity requires outside capital. However, many startups don’t have the collateral or operating history to secure debt.

In order for new risk capital structures to become common practice, we need to create a common way of discussing them.

The old and still predominant risk capital landscape is an equity monopoly.

Sand Hill Road was built on the backs of a subset of a subset of companies who were a fit for venture capital–and then executed brilliantly. These are magnificent success stories that provided magnificent, deserved returns for their investors and employees.

Unfortunately, all current day methodologies, classes, events, frameworks, and vocabulary in the startup world are created to perpetuate this one specific paradigm for funding, growing, and exiting .1% of companies. As a result, countless startups have sold equity to raise funds when it is not a fit for the business they aimed to build.