Knowledge

Growth capital

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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,
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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
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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
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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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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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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.
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Investments are unlevered or use light leverage at purchase.
89: 315: 216:"Market Commentary: Growth Equity Is All Grown Up" 875: 100:Growth capital resides at the intersection of 83:, although certain investors will use various 301: 803:Private equity and venture capital investors 838: 818: 775:Taxation of private equity and hedge funds 592:Private investment in public equity (PIPE) 308: 294: 281:"What is Growth Capital?", Industry Canada 260:. National Venture Capital Association. 246:. National Venture Capital Association. 137:Company's revenues are growing rapidly. 113:, sovereign wealth funds, hedge funds, 14: 876: 79:Growth capital is often structured as 289: 214:Peter Mooradian and Andrea Auerbach, 128: 115:Business Development Companies (BDC) 24: 25: 900: 268: 27:Type of private equity investment 858: 857: 848: 847: 837: 828: 827: 817: 808: 807: 798: 797: 575:Publicly traded private equity 250: 236: 225: 208: 191: 13: 1: 843:List of venture capital firms 277:. HM Treasury, December 2003. 232:GROWTH CAP INVESTOR TARGETING 184: 823:List of private equity firms 580:Business Development Company 95: 7: 162: 10: 905: 667:High-net-worth individuals 457:Leveraged recapitalization 793: 690: 609: 555:Limited liability company 533: 515:Venture capital financing 470: 462:Dividend recapitalization 427: 418: 375: 327: 258:"Growth Equity Companies" 622:Institutional investors 203:The Wall Street Journal 72:the company has on its 63:new product development 760:Liquidation preference 725:Distribution waterfall 677:Sovereign wealth funds 45:investment, usually a 833:Venture capital firms 585:Venture capital trust 813:Private equity firms 541:Private equity firms 490:Post-money valuation 367:Equity co-investment 220:Cambridge Associates 59:alternative conduits 863:Portfolio companies 780:Undercapitalization 632:Insurance companies 550:Limited partnership 495:Pre-money valuation 715:Capital commitment 485:Business incubator 452:Buy–sell agreement 129:Investing approach 70:leverage (or debt) 871: 870: 720:Capital structure 605: 604: 447:Divisional buyout 442:Management buyout 437:Financial sponsor 174:Mezzanine capital 123:leveraged buyouts 85:hybrid securities 47:minority interest 35:expansion capital 16:(Redirected from 896: 861: 860: 851: 850: 841: 840: 831: 830: 821: 820: 811: 810: 801: 800: 662:Commercial banks 652:Investment banks 560:Carried interest 425: 424: 328:Investment types 310: 303: 296: 287: 286: 262: 261: 254: 248: 247: 240: 234: 229: 223: 212: 206: 195: 169:Convertible bond 81:preferred equity 21: 904: 903: 899: 898: 897: 895: 894: 893: 874: 873: 872: 867: 853:Angel investors 789: 740:High-yield debt 693:financial terms 692: 686: 601: 529: 510:Startup company 466: 420: 414: 371: 323: 321:venture capital 314: 271: 266: 265: 256: 255: 251: 244:"Growth Equity" 242: 241: 237: 230: 226: 213: 209: 197:Garland, Russ, 196: 192: 187: 179:Working capital 165: 131: 106:venture capital 98: 54:venture capital 41:) is a type of 28: 23: 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141: 138: 130: 127: 111:family offices 102:private equity 97: 94: 43:private equity 31:Growth capital 26: 9: 6: 4: 3: 2: 901: 890: 887: 885: 882: 881: 879: 864: 856: 854: 846: 844: 836: 834: 826: 824: 816: 814: 806: 804: 796: 795: 792: 786: 783: 781: 778: 776: 773: 771: 768: 766: 763: 761: 758: 756: 753: 751: 748: 746: 743: 741: 738: 736: 733: 731: 728: 726: 723: 721: 718: 716: 713: 711: 708: 706: 703: 701: 698: 697: 695: 689: 683: 680: 678: 675: 673: 670: 668: 665: 663: 660: 658: 655: 653: 650: 648: 645: 643: 640: 638: 637:Fund of funds 635: 633: 630: 628: 627:Pension funds 625: 623: 620: 618: 615: 614: 612: 608: 598: 595: 593: 590: 586: 583: 581: 578: 577: 576: 573: 571: 568: 566: 563: 561: 558: 556: 553: 551: 548: 546: 542: 539: 538: 536: 532: 526: 525:Venture round 523: 521: 518: 516: 513: 511: 508: 506: 503: 501: 498: 496: 493: 491: 488: 486: 483: 481: 478: 477: 475: 473: 469: 463: 460: 458: 455: 453: 450: 448: 445: 443: 440: 438: 435: 434: 432: 430: 426: 423: 417: 411: 408: 406: 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691:Related 421:concepts 163:See also 765:M&A 472:Venture 377:History 347:Venture 730:EBITDA 429:Buyout 357:Growth 335:Buyout 545:funds 410:2020s 405:2010s 400:2000s 395:1990s 390:1980s 597:SPAC 543:and 500:SAFE 319:and 104:and 90:debt 37:and 770:PME 750:IRR 745:IPO 700:AUM 880:: 218:, 201:, 76:. 65:. 309:e 302:t 295:v 20:)

Index

Growth equity
private equity
minority interest
venture capital
alternative conduits
new product development
leverage (or debt)
balance sheet
preferred equity
hybrid securities
debt
private equity
venture capital
family offices
Business Development Companies (BDC)
buyout firms
leveraged buyouts
Convertible bond
Mezzanine capital
Working capital
"With Growth Equity Outperforming Venture Capital, Cambridge Associates Anoints It an Asset Class"
"Market Commentary: Growth Equity Is All Grown Up"
GROWTH CAP INVESTOR TARGETING
"Growth Equity"
"Growth Equity Companies"
Bridging the finance gap: next steps in improving access to growth capital for small businesses
"What is Growth Capital?", Industry Canada
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