- Corporate Finance
Our team has a solid track record of raising capital for companies looking to expand their businesses or fund structural investments to increase shareholder value.
What does Growth Equity mean exactly?
Growth Equity (also known as growth capital or expansion capital) is a type of investment opportunity that allows a company to grow at an accelerated rate. For newly founded companies, so-called “start-ups”, Growth Equity or Growth Capital is the second stage after seed capital. Growth Capital is thus provided to companies so that they are able to expand or restructure their business activities or to enter new markets. In other words, the capital is essentially used to enable companies to grow at an accelerated rate.
Uses of Growth Capital
Growth Capital is used by companies to finance the expansion of their operations, enter new markets, and to increase the company’s sales and profitability through acquisitions. Growth equity investors benefit from the high growth potential and moderate risk of the investments.
Growth Equity transactions typically involve minority investments. Such deals are usually carried out with preferred shares. Growth equity investors tend to favour companies with little or no debt. Hence the lower risk.
Typical growth equity investor profiles include private equity firms, late-stage venture capitalists, and investment funds (mutual funds or hedge funds).
How we add value
We add value by only taking on assignments that we ourselves consider attractive from an investor’s perspective. Therefore, the chances of successful financing increases significantly. This might be through funding from professional investors, corporate venture capital, or financing through the capital markets.
Growth Equity Process Flow:
- Identifying and selecting potential investors from our extensive network and analysing their respective motives for investing in the company
- Setting expectations through an early assessment of the expected business value in a capital raising process
- Creating a knowledgeable and thorough equity story of the company, the market, and historical and projected financial performance
- Advising on financial and commercial vendor due diligence
- Presenting the investment case to potential investors, highlighting key investment opportunities
- Coordinating management presentations and the due diligence phase
- Increasing the success rate of transactions through appropriate preparation, quick action, and commitment of the necessary senior resources.