#31 Everything You Need to Know About the Capital Stack
Understanding the capital stack is essential for making smarter investment decisions. In this episode, we break down the layers — from senior debt to common equity — and explain how each impacts investment structure, risk vs. return, and your position in the payout order.
Whether you’re exploring private equity capital stack strategies, evaluating real estate capital stack investing, or simply want to know how the capital stack affects investment returns, you’ll gain the clarity you need to align your portfolio with your goals.
Join us as we demystify complex deal structures, share real world examples, and give you the tools to confidently assess where your money sits — and why it matters.
Understanding the Capital Stack for Smarter Investing
In this episode of Alt Investing Made Easy, securities attorney Roland Wiederaenders and corporate attorney Sarah Florer break down the capital stack — the hierarchy of funding in any deal — and show you how understanding it can sharpen your investment decisions.
Whether you’re allocating capital in private equity, real estate, or other alternative assets, knowing where you sit in the stack can mean the difference between steady income and outsized growth — or unexpected losses. You’ll learn how senior debt, mezzanine debt, preferred equity, and common equity each carry unique risk/return profiles, and how to align your position with your risk tolerance, liquidity needs and return goals.
This is a must‑listen for growth‑minded investors who want to demystify complex deal structures and confidently navigate opportunities in today’s volatile markets.
Key Takeaways
- Capital stack = repayment priority + risk/return profile
- Debt layers (senior, mezzanine) = safer, more predictable income
- Equity layers (preferred, common) = higher risk, higher upside
- Mezzanine debt blends debt security with equity‑like returns
- Preferred equity offers fixed returns but is still at‑risk capital
- Common equity carries the most risk and control potential
- Every deal is unique — read offering docs carefully
- Ask sponsors regularly how the capital stack has changed
- Leverage can amplify returns and risk — know the balance
- Understanding the stack helps align investments with your goals
Chapters
00:00 – Understanding the Capital Stack
07:00 – Layers of the Capital Stack
15:34 – Mezzanine Debt Explained
21:01 – Preferred Equity Insights
25:31 – Common Equity and Its Implications
30:09 – Navigating Complex Capital Structures
Credits
Sponsored by Real Advisers Capital, Austin, Texas
If you are interested in being a guest, please email us.
Disclaimers
“This production is for educational purposes only and is not intended as investment or legal advice.”
“The hosts of this podcast practice law with the law firm, Ferguson Braswell Fraser Kubasta PC; however, the views expressed on this podcast are solely those of the hosts and their guests, and not those of Ferguson Braswell Fraser Kubasta PC.”
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