Growth Capital


Sourcing Capital for Business Growth

Capital Defined


Financial Capital is any economic resource used by businesses to buy what they need to make their products or to provide their services to the sector of the economy upon which their operation is based; it comes from two sources: debt and equity.

Debt Capital refers to borrowed funds that must be repaid at a later date, usually with interest. Common types of debt capital are bank loans, personal loans, overdraft agreements and credit card debt.

Equity Capital refers to funds generated by the sale of stock, either common or preferred shares. While these funds need not be repaid, investors expect a certain rate of return.

Private Equity (PE) offers a blend of equity and debt and typical strategies include leveraged buyouts, venture capital, growth capital, distressed investments and mezzanine capital; typically to gain control of an existing or mature company.

Venture Vapital (VC) is money provided to seed, early-stage, emerging and emerging growth companies. The venture capital funds invest in companies in exchange for equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology and IT.

Growth Capital Defined


Growth capital (also called expansion capital and growth equity) is a type of private equity investment, usually a minority investment, 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.

Companies that seek growth capital will often do so in order to finance a transformational event in their lifecycle. These companies are likely to be more mature than venture capital funded companies, able to generate revenue and operating profits 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 alternative conduits 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 new product development.

Growth capital is often structured as preferred equity, although certain investors will use various hybrid securities that include a contractual return (ie. 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 debt, either because of the stability of the company's earnings or because of its existing debt levels.

Equity


Point Capital has an international network of private investors and funds (US, Europe, Asia) with interests in a wide range of assets and industries.

These investors will consider funding equity and debt in the same entity or venture if the fundamentals meet their investment and risk criteria.

In addition, Point Capital has considerable experience in capital raising via IPO and finding cornerstone shareholders, and the required pre-IPO funding.

Debt


Point Capital network includes individuals, family offices, funds and banks who are willing to provide debt funding to businesses seeking additional leverage to capture growth opportunities.

Debt can be structured in a number of ways depending on the requirement, e.g. from a simple secured loan through to bonds or convertible notes.

Term of the debt can be structured and higher cost mezzanine debt funding can also be arranged.

Co-Invest


Where there is a fit with current direct investments, Point Capital will consider co-investment with appropriate parties in a more traditional private equity approach.

Point Capital's partners have a number of hi-tech ventures and we are willing to further leverage our experience in commercializing novel technologies internationally.