A New York-based private equity deal platform to connect private companies seeking more than $US10 million in growth capital with institutional investors and family offices and funds has launched this week.
Launched by a team of investment bankers, GrowthCap opened with over $US50 million worth of deals in market.
While the platform is targeting more established young companies, it offers increased global reach to more established Australian start-ups who might otherwise need to set up a presence in the US to access investors.
GrowthCap’s head of product development, Paul Anderson, told StartupSmart while they don’t have an Australia-specific focus at this point, they do have investors interested in the region and the challenges of raising funds are similar worldwide.
“Most companies are opting to manage capital raising themselves, but the problem is that the process is all-consuming and completely distracting for company owners and executives,” Anderson says.
“The main challenges we saw were that these companies struggled with the initial stage of identifying and researching potential investors as well as with managing the transaction process once the ball got rolling.”
Any company will be able to access GrowthCap’s investor research. Companies seeking investment need to be raising more than $US10 million, and provide information on their management team’s experience, as well as the company’s financial history, growth projections and plans.
Anderson adds more established start-ups seeking expansion capital should be aware these later-stage investors are likely to be more significantly involved in the company, so they need to be mindful of who they partner with.
“A growth capital investment is most often significant enough that an investor is going to have large involvement and influence on a company’s strategic direction and key operations. Just as investors are going to do their diligence on management and operations, companies should be equally concerned with learning as much as they can about their future partners,” Anderson says.
“Understand the value they bring to the table and don’t be afraid to ask questions, perform additional research, and even ask for references from an investor’s previous portfolio companies.”