It seems you are saying "we'd like to recoup cash from our companies, if possible, without forcing them into premature dividends or exits, and without diluting

It seems you are saying "we'd like to recoup cash from our companies, if possible, without forcing them into premature dividends or exits, and without diluting our equity." Yes? Well, that is a preferred equity instrument, eg, "This bit gets paid before the common equity gets a dividend or distribution." Preferreds generally have a stated "interest" rate, but payments are at management discretion (accruing to principal when not made) but there is no reason that can't be zero. They can also have maturity dates for repayment. Yes, it looks a lot like a loan, and that's sort of typical for this "junior to all other obligations / senior to other equity" layer of the capital structure. (And note that there could well be legal and tax differences between preferred and debt. I don't know how it complicates the documentation you're already doing with the loan and equity pieces. IANAL.) The important difference for you is jargon. "Preferred equity" doesn't carry a suggestion of personal liability, it's equity with a return clearly tied to the venture's success, but ahead of the common. Your founders won't know the term, but any advisor they speak with should. Described thus, I still don't know if I like your proposition, or what others should think of it, but I'm closer to understanding just what that proposition is.