As I discussed in an
earlier article, growth equity (or growth capital) resides on
the continuum of private equity investing at the intersection of
venture capital and control buyouts. Growth capital is designed to
facilitate the target company's accelerated growth through
expanding operations, entering new markets, or consummating
strategic acquisitions.
In addition to borrowing redemption rights from venture capital
and debt financings, and preferred equity securities similar to
those found across the private equity continuum, growth equity
investors borrow protective provisions (operational control)
commonly found in control buyouts and debt financings. This article
provides a high-level overview of common protective provisions and
their use in different forms of debt and equity capital, with a
particular focus on protective provisions often found in minority
growth equity investments – that is, operational control
without cap table control.
