Mezzanine Funding (Mezzanine Financing)
Mezzanine funding (mezzanine financing) is typically relevant for a startup company that already has a product and some market success. In other words, the company is already cost-effective, secure and has passed the first funding stages, like seed stage and venture capital. At this point, mezzanine capital could be a way to get money and keep growing.
A company could receive mezzanine financing from a financial institution like investment bank or angel investors group. There are three ways mezzanine funding obtains a return on investment: equity ownership, cash interest, payable in kind (PIK).