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Growth Equity

Beckon Capital is a growth equity focused investment manager.

What is growth equity?

Growth equity investment takes a minority shareholding in established businesses of around 20-40% in exchange for capital and resources. It’s sometimes called expansion capital or growth capital.

Typically, investments are for a longer term of around 8-10 years.

Growth Equity is also known as Patient Capital.

“Growth equity can be used to accelerate growth, fund acquisitions or offer liquidity to current shareholders.” *

Growth equity is different to venture capital and private equity

Growth equity occupies a middle-ground between traditional early-stage venture capital and private equity. It invests in established enterprises needing capital for:

  • Product development
  • Resources such as infrastructure, staffing or technology to support an existing or new business model
  • Expansion of an enterprise into new market segments or locations
  • Driving scale and accelerating a growth plan

Venture capital provides funding for markets and business models that aren’t yet proven, while private equity funding is typically deployed to acquire entire companies that are more mature.

“Venture Capital investors assume significant market and product risk. In contrast, growth equity investors assume primarily execution and management risk.” *

Growth Equity boosts businesses

Designed to create value for both investors and investments, Growth Equity combines capital with capability, providing strategic insights and access to expertise the investment may need to grow.

The founders are always in control because Growth Equity takes a minority partnership, providing capital and capability to make the business stronger. Small businesses get access to resources usually associated with larger companies such as data, subject experts and innovative tools.

Risk is reduced. Growth equity works alongside the founder, providing insights and guidance to help lift productivity and monitor the progress of achieving agreed strategic milestones.

“Growth equity offers a modest level of risk, which can be mitigated by the value creation and team development tools that growth equity investors typically employ.” *

A funding solution that works for you

Growth Equity can free up SMEs and local built environment projects from the restrictions, pressure and cashflow implications of debt financing; the most common source of funding in these segments. With the right partner, Growth Equity encourages unconstrained thinking to ignite the real potential of a business - and deliver sustainable financial returns.

The UK and Canada are embracing growth equity

Growth Equity is known, used and proven globally but little used in Australia. Beckon is one of Australia’s earliest fund managers to offer Growth Equity.

The British Growth Fund kicked off in 2011, and the Canadian Growth Fund in 2017. They invest in small to medium-sized enterprises and now boast impressive balance sheets.

The Australian Federal Government established a Business Growth Fund in October 2020.

* Understanding the difference between Growth Equity and Venture Capital – Venero Capital Advisors January 18 2018
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