Overview

Depending on your type of business, its current valuation and growth plan, different types of growth capital can be used. Deals can involve a combination of bank debt, mezzanine debt and equity or can be 100% of one kind of capital. The type of growth capital needed is usually determined by a consideration of what the money is to be used for. Companies employing acquisitions as a growth strategy can use a fair amount of debt. Companies employing a more organic (internal growth) strategy generally need more equity.

Striking the balance between debt and equity is important to do. This is accomplished by looking at the magnitude of the growth strategy relative to the current business, and the riskiness of the growth strategy. For example, there is a different risk profile between doubling the size of your business via acquisition vs. launching a new product line. An acquisition has less market risk but more integration risk. A new product launch has more customer acceptance and market risk and less integration risk. We have been involved in many different types of growth strategies with our clients. In most instances, our clients have chosen to acquire other businesses as a way to scale. Some of the more common growth strategies include:

Organic Growth Strategies


• New product development.
• Sales and marketing investment.
• Expanding management team and systems.

Acquisition Growth Strategies


• Acquisition of another business.
• Acquisition of a new product line.
• Acquisition of customer accounts.

At Attract Capital, we are experts at figuring out the best structure for your growth capital deal. Our structures are proactively designed and customized. We create value for our clients by designing structures that require capital providers to meet our needs vs. their needs.