Wait long enough, and all the old fashions come back. The latest example: hybrid securities.
Hybrids act like both debt and equity. They come in handy when credit is tight (and it hasn’t been tighter in a long time), when cash is trickling (as in the early stages of a start-up) and when typical equity investors (friends and family, angels and venture capitalists) prove too skittish.
Hybrids became popular back in the 1960s, after the U.S. government started the Small Business Investment Companies program, which allowed wealthy individuals to form entities (SBICs) that could borrow funds from the Small Business Administration to re-lend to start-ups. The SBICs charged interest on that debt and also took an equity stake to compensate for the risk. SBICs were the start of institutionalized venture capital in the U.S.
This article originally appeared on Forbes.com.