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and as such growth capital is provided by a variety of sources. The types of investors that provide growth capital to companies span a variety of both equity and debt sources, including private equity and late-stage venture capital funds,
45:
funded companies, able to generate revenue and profit but unable to generate sufficient cash to fund major expansions, acquisitions or other investments. Because of this lack of scale, these companies generally can find few
76:
that include a contractual return (i.e., interest payments) in addition to an ownership interest in the company. Often, companies that seek growth capital investments are not good candidates to borrow additional
38:, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business.
187:
718:
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to secure capital for growth, so access to growth equity can be critical to pursue necessary facility expansion, sales and marketing initiatives, equipment purchases, and
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Companies that seek growth capital will often do so to finance a transformational event in their lifecycle. These companies are likely to be more mature than
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Capital is used for company needs or shareholder liquidity and additional financing rounds are not usually expected until exit.
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Growth capital can also be used to effect a restructuring of a company's balance sheet, particularly to reduce the amount of
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or where competition to fund startup businesses is intense, growth capital becomes an attractive alternative.
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Growth equity investments, as defined by the
National Venture Capital Association, feature the following:
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81:, either because of the stability of the company's earnings or because of its existing debt levels.
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188:"With Growth Equity Outperforming Venture Capital, Cambridge Associates Anoints It an Asset Class"
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Investor is agnostic about control and purchases minority ownership positions more often than not.
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Bridging the finance gap: next steps in improving access to growth capital for small businesses
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106:, and mezzanine funds. Growth capital investments are also made by more traditional
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Company may be founder-owned and often has no prior institutional investment.
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Industry investment mix is similar to that of venture capital investors.
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Company is cash flow positive, profitable or approaching profitability.
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Investment returns are primarily a function of growth, not leverage.
110:. Particularly in markets where debt is less available to finance
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Investments are unlevered or use light leverage at purchase.
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205:"Market Commentary: Growth Equity Is All Grown Up"
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89:Growth capital resides at the intersection of
72:, although certain investors will use various
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792:Private equity and venture capital investors
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807:
764:Taxation of private equity and hedge funds
581:Private investment in public equity (PIPE)
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283:
270:"What is Growth Capital?", Industry Canada
249:. National Venture Capital Association.
235:. National Venture Capital Association.
126:Company's revenues are growing rapidly.
102:, sovereign wealth funds, hedge funds,
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68:Growth capital is often structured as
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203:Peter Mooradian and Andrea Auerbach,
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104:Business Development Companies (BDC)
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16:Type of private equity investment
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564:Publicly traded private equity
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832:List of venture capital firms
266:. HM Treasury, December 2003.
221:GROWTH CAP INVESTOR TARGETING
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812:List of private equity firms
569:Business Development Company
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7:
151:
10:
894:
656:High-net-worth individuals
446:Leveraged recapitalization
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544:Limited liability company
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504:Venture capital financing
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451:Dividend recapitalization
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247:"Growth Equity Companies"
611:Institutional investors
192:The Wall Street Journal
61:the company has on its
52:new product development
749:Liquidation preference
714:Distribution waterfall
666:Sovereign wealth funds
34:investment, usually a
822:Venture capital firms
574:Venture capital trust
802:Private equity firms
530:Private equity firms
479:Post-money valuation
356:Equity co-investment
209:Cambridge Associates
48:alternative conduits
852:Portfolio companies
769:Undercapitalization
621:Insurance companies
539:Limited partnership
484:Pre-money valuation
704:Capital commitment
474:Business incubator
441:Buy–sell agreement
118:Investing approach
59:leverage (or debt)
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709:Capital structure
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436:Divisional buyout
431:Management buyout
426:Financial sponsor
163:Mezzanine capital
112:leveraged buyouts
74:hybrid securities
36:minority interest
24:expansion capital
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70:preferred equity
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233:"Growth Equity"
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43:venture capital
30:) is a type of
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194:, Aug 7, 2013,
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28:growth equity
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22:(also called
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774:Vintage year
699:Capital call
671:Crowdfunding
606:Corporations
509:Venture debt
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108:buyout firms
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636:Foundations
559:Pledge fund
351:Secondaries
211:, June 2013
867:Categories
724:Envy ratio
631:Endowments
494:Seed money
408:Terms and
174:References
694:Cap table
599:Investors
523:Structure
341:Mezzanine
329:Leveraged
85:Providers
744:Leverage
680:Related
410:concepts
152:See also
754:M&A
461:Venture
366:History
336:Venture
719:EBITDA
418:Buyout
346:Growth
324:Buyout
534:funds
399:2020s
394:2010s
389:2000s
384:1990s
379:1980s
586:SPAC
532:and
489:SAFE
308:and
93:and
79:debt
26:and
759:PME
739:IRR
734:IPO
689:AUM
869::
207:,
190:,
65:.
54:.
298:e
291:t
284:v
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