Capital Call

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What is a Capital Call?

Capital calls, also called securities loans and drawdowns, are requests to a startup investor for capital. Investors contributed money in the beginning in an initial drawdown. The startup generally holds the initial drawdown in an interest-bearing account, such as a mutual fund or retirement account, until needed.

Capital Call Examples

Examples of when startups can make capital calls include:

  • Example 1. Purchasing necessary supplies
  • Example 2. Obtaining equipment
  • Example 3. Bridging a short-term project
  • Example 4. Paying taxes and fees
  • Example 5. Research and development projects
  • Example 6. Marketing investments
  • Example 7. Technology investments

Check out this web page for more info on capital calls.

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