The math nobody runs until it's too late.
Equity feels free because there's no monthly payment. It's the most expensive money you'll ever take. A $5M round at a $30M post-money valuation costs you roughly 17% of the company. If you sell the business for $50M five years later, that 17% is $8.5M that walked out the door on the day you signed. You just didn't feel it yet.
When the business already produces real cash flow. Debt has a fixed cost and an end date; equity's cost compounds with everything you build afterward. If your company can support a payment schedule out of the cash it already generates, borrowing preserves the ownership you spent years earning. Equity makes sense when you're funding a growth curve the current cash flows can't carry.
Banks pattern-match. They see a follower count where a balance sheet should be and pass, because their underwriting was never built to read audience behavior as a source of repayment. The business can be institutional-grade by every standard a lender should care about and still fail the pattern match.