What is Growth PE?

Can someone explain in thorough detail what growth private equity is? Also, what industries and types of companies are attractive at this point in time in growth PE?

Thanks

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Best Response

To my understanding, Growth PE targets companies that are after the VC / seed investing. Depending on the firm/fund, many of the companies that are targeted have a significant amount of growth already, great margins, and are doing quite well. But the companies want to take the company to the next level by expanding geographically or entering a new product line or purchasing a competitor. That's where growth PE comes in. From my exp, they use all cash as the company is still growing and can't handle much leverage.

 
nickcabThat sounds right. Thanks alot. So would most tech companies be considered attractive to PE firms that strictly invest into growing companies? Like Google, Cisco, MSFT, etc?

Wrong. the companies you listed are exactly NOT what growth equity firms look for.

 

Yeah, seriously, does that guy even know what growth means? Growth equity means investing in small companies that have enormous growth potential - generally $20-50MM per investment for companies with $100-200MM in revenue.

 

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