Growth Equity and Structured Ownership

Growth equity finances businesses that have established a product or service and need capital to expand. The investment may fund new markets, product development, acquisitions, or liquidity for existing shareholders. Unlike a conventional control buyout, a growth investment may leave the founder or another shareholder in control.

The investor is underwriting a growth path and the rights attached to its ownership. Strong historical revenue growth is a starting point. The analysis must establish the cost of acquiring and serving customers, the durability of retention, and the capital required to reach the next stage.