# How should a hardware startup build its capital stack before Series A?

Build the stack around what customers, suppliers, and lenders can already verify: payments, orders, receivables, and assets. Use equity for uncertainty that those sources cannot finance, rather than making another priced round the only route to production.

## Match the instrument to the evidence

A customer deposit can fund an order; supplier terms can bridge production; an asset lender may finance equipment with a resale market. None automatically covers engineering risk or an unproven product. Separate those uses before comparing proposals, and model repayments alongside delivery costs.

Chapter 5 emphasizes that revenue history matters as well as revenue size. Its Wayflyer example starts at **$10,000 average monthly USD revenue for the preceding six months**, subject to the provider’s other requirements. That published floor is an application condition, not a promise of an offer. [Wayflyer requirements, checked October 30, 2026](https://go.speedstrapping.com/wayflyer-requirements).

## Worked example: a production order

**Illustrative assumptions, not a company case.** A company needs $240,000 to build an order. The customer will pay a $100,000 deposit, while the manufacturer offers $60,000 of deferred payment. The immediate production gap is $80,000: $240,000 − $100,000 − $60,000.

That does not mean the company needs only $80,000 overall. Add payroll, freight, taxes, defects, and any delay before collection to the weekly cash forecast. Compare financing for the residual gap with a smaller run or a revised deposit schedule. Ask the manufacturer what happens if delivery slips; deferred payment is still a liability.

## A useful next step

Make one schedule with each use of cash, its payment date, the proof available to a funder, and the cash available to repay. Discuss actual terms with providers before putting their capital in the base case. [Explore Cap Stack Compass](https://capstackcompass.ai/).

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This page is an original summary of an argument developed in *Speedstrap*, not an extract from the book.

From Chapter 5 of *Speedstrap*. [Find the book on Amazon](https://go.speedstrapping.com/book).

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