Beyond the Popular Playbook: Why Equity Raising Serves Investors but Debt Empowers Founders

Disclaimer: The views expressed in this essay are solely my own and do not represent those of my employer

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Cited reference: Paul Kwan, Managing Director at General Catalyst, LinkedIn post on Oracle’s capital allocation and Larry Ellison’s ownership stake increase (September 2025).

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Table of Contents

1. Abstract

2. Introduction: Why Equity Raising Became the Popular Narrative

3. Investor Incentives and the Allure of Unlimited Upside

4. The Cost of Popularity: Dilution as a Silent Erosion of Founder Value

5. Debt as Founder Leverage: Fixed Cost Capital and Betting on Yourself

6. Oracle as the Case Study: How Larry Ellison Reversed the Playbook

7. Why Most Tech and Health Tech Companies Still Default to Equity

8. Alternative Financing Models: Beyond Venture Capital and Equity Rounds

9. Implications for Health Tech Entrepreneurs and Investors

10. Toward a New Founder-Centric Capital Philosophy

11. Conclusion: From Popularity to Discipline

Abstract

Equity raising has become the dominant financing narrative in technology and healthcare. Investors prefer it because it grants unlimited upside with no obligation for repayment, and the language of equity has become so deeply embedded in venture and growth financing that most founders accept it as the only viable playbook. Yet equity is not neutral. It is a transfer of future upside from founders to investors, often structured in ways that erode ownership and strategic control over time. Debt, on the other hand, with its fixed costs and limited upside for lenders, empowers founders who are confident in their long-term value creation to capture a disproportionate share of future rewards. This essay reframes capital allocation by examining Oracle’s decades-long discipline under Larry Ellison, who increased his ownership stake from twenty-three percent in 2010 to forty percent today without issuing new equity. By situating Oracle as a counterexample to Silicon Valley’s obsession with dilution-heavy growth, and extending these insights to the health tech sector, we argue that founders should resist the popularity of equity raising and embrace financing models that allow them to bet big on themselves.

Introduction: Why Equity Raising Became the Popular Narrative