Securing growth capital is a strategic step for businesses aiming to scale. Here’s a breakdown of growth capital options, when to use each, and a CapCompass success story.
Understanding Growth Capital
Growth capital is investment capital meant to finance expansion, product development, and market entry. Unlike working capital, growth capital doesn’t fund day-to-day expenses—it powers the next phase of business growth, helping companies take on larger projects and access new markets.
Options for Securing Growth Capital
1. Equity Financing: By offering shares to investors, businesses can raise significant capital without the burden of debt. Equity financing is suitable for companies with a high growth potential and scalable models but requires a willingness to share ownership.
2. Debt Financing: Companies can borrow capital with structured repayment terms, retaining full ownership. Debt financing is ideal for businesses with a strong cash flow and the ability to meet regular repayments.
CapCompass advises clients on finding the right balance, helping them leverage these financing options to fund growth sustainably.
CapCompass Case Study
A retail client approached CapCompass for growth capital to expand its market presence. After analyzing its financials and growth projections, CapCompass advised a mixed approach of equity and debt financing, ensuring the client retained substantial ownership while securing adequate funds. The result was a highly successful capital raise, allowing the business to rapidly increase market share and revenue without sacrificing control.
CapCompass’s support made this growth possible, guiding the client through a seamless capital-raising journey that equipped them for long-term expansion.