Growth Equity

Proven businesses, still in their ascent.

Investment in established, profitable or near-profitable private companies that have found their model and need capital to scale, usually as a minority partner.

Strategy

The stage where the risk has fallen but the growth has not.

Growth equity occupies the ground between venture capital and buyout. The companies have moved past the existential risk of the start-up phase: they have real customers, real revenue and a model that works. What they need is capital to grow faster than their own cash flow allows.

For investors, this stage offers much of the growth of venture with less of its binary risk. Positions are usually minority stakes in companies that already work, taken alongside founders who want a partner, not an owner.

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Proven

Companies with real revenue and a working model

Minority

Typically partnering with, not replacing, founders

Scaling

Capital to accelerate established growth

7-10yr

A long, but not open-ended, horizon

Growth, with the existential risk behind it.

What defines it

Between venture and buyout.

A model that works

These companies have validated their product and their economics. The question is scale, not survival.

Minority partnership

Investments are usually minority stakes, aligning with founders who seek capital and counsel rather than a sale.

Modest leverage

Unlike buyouts, growth equity relies on the company's expansion rather than heavy borrowing to generate returns.

Suitability & risk

What to weigh before allocating.

Still private

Positions are illiquid and held for years until a sale or listing provides an exit.

Execution risk

The companies must deliver on their growth plans; not all do, and capital can be lost.

Valuation discipline

Prices in popular sectors can run ahead of fundamentals. Manager discipline matters.

Manager selection

As across private markets, the gap between the best and the rest is wide.

Questions

What clients ask us first.

How is growth equity different from venture capital?

Venture capital funds young, often pre-profit companies where the central risk is survival. Growth equity funds established companies that already work and simply need capital to scale. The result is typically a narrower range of outcomes: less chance of a company failing outright, and less chance of the extraordinary returns a rare venture success can produce.

How is it different from a buyout?

Buyouts usually acquire control of mature companies and often use significant borrowing. Growth equity usually takes minority stakes in still-growing companies and relies on expansion, not leverage, to generate returns.

Who is it suitable for?

Investors seeking exposure to private company growth with a more balanced risk profile than venture, who can commit capital for the long term and accept illiquidity.

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