A closer look
Long before venture capital existed, small suppliers acted as informal banks for one another to keep assembly lines moving. Instead of begging banks for expensive loans, manufacturing networks routinely delay invoice payments for months, creating a massive, interwoven web of trade credit. It is a beautiful display of mutual trust that keeps working capital flowing—until one major firm defaults, triggering a cascading domino effect of bankruptcies that can wipe out an entire industrial district.
