Development capital comes under private equity investment category but defies any precise classification since they are not buy-out transactions. Development capital transactions can be classified in 'money in' and 'money out' categories. In 'money in' deals, new capital is infused for development of new products or expansion into new geographies in exchange for new shares, though convertible notes are frequently used as well. In 'money out' transactions, the owner sells some of the shares to raise funds for himself.
Finding suitable investors is a huge challenge when you are looking for capital to finance further growth.Your company has passed the start-up stage, is profitable and holds sufficient promise to be able to raise finance to enable it to grow.
The key aspect of a development capital deal is that the majority voting control is not passed to the buy-out firm though some amount of negative control, like the right to veto certain decisions, can be granted. Since accounts can't be consolidated and interest on new debt can't be set off at the holding company level, generally no debt is used at all for these types of transactions. However, like other buy-out transactions, development capital involves investing in matured and established companies which have strong cash flows and decent market shares (i.e. – 'cash cows' in the BCG Matrix), but privately held. Development capital general partners (GPs) try to increase after-tax profits (earnings), i.e. they try to increase the firm's bottom-line.
- Preparation of business plans that project strong growth in future
- Dilution of ownership control
- Identify potential investors that encourages partnership approach with investee companies and share common goals and objectives
- Have experienced investors on the firm's board who can commit capital when the right opportunity appears
- Rigorous due-diligence to identify potential investors
- Prepare detailed business plans with post-investment capital structure and shareholding patter
- Efficient and mutually agreed equity ownership to avoid potential future conflicts
- Bringing qualified investors who can commit long-term capital
- Our senior executives help you to connect with active and interested investors in your industry
- Understand your investment strategy and preferences
- Communicate this successfully to debt and equity investors
- Demonstrate sound venture planning and business skills
- Our VenturePreneurs have been assisting businesses like yours for many years
- Our entrepreneurial approach provides global capital raising services
- Our active network and extensive proprietary database offers access to investors across Europe and beyond
- No cure, no fee
- Additional funding to further bring your business to market
- Personalized attention and commitment to your goals
- Unbiased ad-hoc advice and hands-on extensive entrepreneurial experience
- Wall Street know-how on alternative structures, tax laws and similar transactions
- Transparency, on-going communication, trust and discretion
Dear entrepreneur, looking for Development Capital? Please leave us your contact details or enter your business plan in choosing one of the two options below.