I had a great conversation with Nate Littlewood from Future Ready CFO on his podcast.
Nate is a super sharp financial mind, especially for scaling consumer brands, and a fun interviewer to boot. We discussed a lot of topics around working capital, cycle mismatches and better funding. And I touted Elephant Herd Capital’s solution too.
The Future Ready CFO summary does a great job and I paste it below.
Episode Description
There's a gap in every product business between the day you pay for inventory and the day a customer pays you for it. Most eCommerce founders just accept that gap as a cost of doing business. Ben Tregoe has spent his career figuring out why that gap exists — and what a better structure looks like.
Ben's background cuts across investment banking, the early days of Facebook performance advertising, and co-founding DrivePoint, one of the better-known FP&A platforms in the eCommerce space. He's seen the financial mechanics of hundreds of brands from the inside. What he kept finding: the brands that deserve better capital access can't get it, and the capital they can get is structured in a way that actually makes their cash flow worse. In this episode, Ben breaks down what's structurally broken about how eCommerce brands finance their inventory, why the real cost of capital isn't the interest rate, and what a smarter financing structure actually looks like.
Key Takeaways
- The real cost of capital isn't the interest rate — it's whether you have enough of it. A brand turning 5x on inventory in 120 days has an IRR in the hundreds of percent. Cheap capital that's insufficient is worse than expensive capital that fully funds the cycle.
- Most inventory loans make your cash flow worse, not better. MCA repayments start before your inventory is even sellable — so you're using revenue from old inventory to repay debt on new inventory, which balloons your working capital needs over time.
- Supplier terms are the most underused lever in eCommerce finance. Only around 10% of brands at the $2–10M level are actively negotiating them. Paying a higher unit cost in exchange for 60–90 day terms is often the smarter trade.
- Selling equity to fund inventory is one of the most expensive mistakes a founder can make. If your goal is a $100M exit and you've sold 80% of your equity along the way, you've effectively funded your inventory at the cost of $80M in value.
- Volatile, spiky bank balances don't just create stress — they cause founders to underspend on growth. Cash-constrained founders hold back on marketing and inventory bets at exactly the moments they should be leaning in.
- Design your business like a machine before you build it. The founders who win at capital efficiency are the ones who understand their inventory cycle IRR, their unit economics, and their cash conversion cycle before they start scaling.