Growth equity is a type of private equity that invests in companies around $10 million in revenue and scales them to $50-100 million or more. Unlike traditional buyouts, growth equity often takes a minority stake and exits through acquisition, IPO, or when a larger PE firm buys the company.
maybe just walk us through what's the difference or fundamental difference between private equity and growth stage venture capital.
Growth equity fits under the private equity umbrella. Private equity tends to be buyouts. Uh, we're kind of investing in businesses that are high growth that maybe, uh, want to invest in product or sales and marketing, uh, to accelerate their growth faster. So let's say we get involved with the business at, you know, $10 million of revenue. Uh, hopefully we can kind of scale that to $50, $100 million and beyond. And at that point Many times the PE, or the private equity, is the buyer of that business. So they're coming in, they're, uh, that's kind of the exit or liquidity event for us and the founders. And that can be, you know, full majority sale, or, you know, 100% of the business, or could even be 55% of the business or something. There's a lot of big private equity funds that have raised a lot of capital. They tend to be the most logical acquirers for a lot of the companies that we invest in. Obviously, other routes for liquidity could be a strategic, uh, acquisition or IPO as well.
