What is growth capital & how does it work?

Growth funding is a type of equity funding designed to help businesses invest in growth opportunities that will enable them to scale. This guide provides an overview of growth capital, explains how it differs from other types of equity funding and details how to decide whether it is right for your business. So, what is growth capital?

What are capital growth investment objectives?

Capital growth investment objectives can be classified into moderate growth and high growth. An investor seeking moderate capital growth might invest in equities of stable companies such as blue-chip stocks. On the other hand, an investor seeking high capital growth might invest in more speculative investments or growth stocks.

How do I know if growth capital is right for my business?

So how do you know if it’s right for your business? A few indicators that a business is suitable for growth capital include: A stable financial position – Businesses that have had a consistent cashflow and are at break-even or profitable are good candidates for growth capital investment.

What is the difference between growth capital and venture capital?

The growth capital objective is to provide target companies to boost growth. It focuses on investment in mature companies. In comparison, venture capital focuses on early-stage companies with an unproven business model. Compared to controlled buyouts and standard venture capital, growth capital is a less well-known form of investment.