It is the goal of all businesses is to thrive and maximize profits. There are an awful lot of components necessary in achieving this result, including luck, planning and hard work. There are also entities within the business world that aim to find businesses that are experiencing success to provide services to them that can help them to continue to expand and develop. Growth capital investment firms are looking to make the success of other businesses their own.
What Is a Growth Capital Investment Firm?
Peter Comisar certainly understands growth capital because he has much experience in the field. Growth capital investment is a private equity investment in companies that have demonstrated solid performance in the past but are looking for an infusion of capital in order to reach a leveraged buyout.
When a growth investment firm is interested in casting its lot with other companies, it evaluates that company according to how it has performed publically. It also examines the company’s business model to determine whether they’ve planned
How Do Growth Capital Firms Help Other Companies?
When a business is in the late stage of its life, it is looking for certain things to help to keep moving forward, such as revenue-based expansion, operating margin expansion and sustained revenue growth. An injection of growth capital can help a business to increase spending on marketing and advertising campaigns, hire more staff and sales representatives, develop existing products and expand into new markets.
Besides offering an injection of capital, growth capital firms offer other kinds of assistance to the businesses with whom they join. Because they typically are minority shareholders, they cannot simply execute decisions. Rather, their task is to align themselves philosophically with the management of the business to compound its critical thinking resources. You might think of it as more like-minds trying to solve problems to achieve a positive common outcome.
Growth capital firms have a singular understanding of their business, and can offer insights into many areas of expertise, including market expansion and customer cohort analysis, developing relationships with institutional lenders, mergers and acquisitions and capital structure optimization strategies.
When a business has proven that it has profitability and staying power, it is ready to accept help from a growth capital firm. By allowing the firm to supply capital and other important criteria, it is ready to continue growing into its place in the market, and ultimately for a leveraged buyout in its mature stage.