Home Financial & Banking Terms What is Growth Capital?

What is Growth Capital?

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Growth Capital

Growth Capital is a equity investment  which is used by big companies to expand their business. Here the investments comes from private equities either within in the company or from outside.

The success of every business depends on its growth or expansion, thus it’s very important for a company to find some investments or funds. Using equities to expand is different from using debt funds, since there are no interest in equity funds other than profit sharing.

Who provides this growth capital?

Growth capital can be provided either by private equities as mentioned above. The fund is raised and treated similar to that of venture capital. Growth Capital is also known as expansion capital or growth equity. Venture capital has to be arranged through venture capitalists.

A little history

The idea of venture capital and private equities dated back into the last quarter of 20th century, where the trade became an important aspect for the people all over the world. Growth capital needn’t took a lot of time to sparkle in the minds, its actively came into business around 2000’s.

India is a vast economy and this is a very good strategy that can be used in Indian businesses to achieve the global key to world market.

1 COMMENT

  1. Every business is unique but many experience the same problems during the early years of growth. Capital growth is mainly on the basis of the current value of the asset or investment, in relation to the amount originally invested in it. It is simple and brings the best ideas with a special focus on opportunities.

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