So I recently wrote about non accredited crowdfunding in the Wall Street Journal. Today we take a look at the opposite extreme. I spoke with the founding team of Growth Cap which just launched with $50,000,000 in deals on the platform. For this post, we did a Q&A with the CEO RJ Lumba and instead of my opinion, you decide
- What is GrowthCap?
GrowthCap is a private equity deal platform where established private companies can raise growth capital from institutional investors and family offices. Initially, GrowthCap provides companies with two distinct services – investor research and deal management. With research on over 3,000 institutional investors, including hundreds of family offices, companies can perform diligence on growth capital providers and narrow in on the most relevant ones. The deal management service allows companies to run a discreet capital raising process by leveraging technology to track investor interest, confidentially invite investors, and manage access to deal documents and diligence materials.
What is the problem you’re solving?
The main feedback we’ve gotten from our conversations with company executives is that they struggle most with the initial stage of identifying and researching potential investors as well as with managing the transaction process while simultaneously trying to run their business. They found capital raising to be a tremendous distraction and all-consuming. GrowthCap aims to dramatically improve this process.
What makes you different than existing solutions?
Platforms up until now have been focused primarily on early stage and seed funding. Existing solutions for the more mature growth capital market center around traditional investment bankers. These options are costly and leave the institutional growth capital market out of reach for the vast majority of companies. GrowthCap also leverages both technology and human execution, providing active guidance and support from a GrowthCap investment banking professional.
What segments does GrowthCap serve?
The GrowthCap platform is industry agnostic, with investors across all industries, but the deal management service is limited to companies raising anywhere from $10 million to more than $75 million and who meet key criteria for financial performance, growth potential, and management team experience.
How do you source deals?
GrowthCap sources opportunities for its deal platform through various channels. In addition to online and offline inquiries, our deal professionals have direct relationships with emerging growth company CEOs and CFOs, and we have different partnerships with private company service providers including law firms, accounting firms, and investment banks. We have also developed partnerships with sector experts and consultants who are familiar with the leading companies in their areas.
So how does the initial deal flow look?
The initial opportunities on the platform total $50M of value in market and include companies in industries such as technology, media, financial services, infrastructure, and energy.
What is GrowthCap’s revenue model?
GrowthCap offers a basic subscription for companies to access detailed investor firm and individual professional research. A premium subscription is available for companies who meet the platform’s criteria and wish to leverage GrowthCap’s deal process management tools and connect directly with investors. Lastly, GrowthCap will also provide deal advisory services at a fraction of the cost of traditional investment bankers based on the success of the transaction.