In this insightful episode of the Scaling with Sumeru podcast, Sumeru Managing Partner Kyle Ryland shares the unique distinction between private equity and growth capital investments.
During this episode, Ryland reveals what Sumeru looks for in founders. He also explained the impact of growth capital vs. private equity for growth-stage companies.
Growth Capital vs. Private Equity
“We’re what we call a “growth-first investor,” Kyle Ryland said during the episode. “If you look at the typical organic growth rates of companies in our portfolio, they’re very high. They look nothing like what you might find in a private equity portfolio.
“These are growth rates of 30%, 40%, 50%, 60%, 70% — and they’re doing that organically, without many add-ons and trying and manufacturing growth.
“Growth capital investors build a strategy around that. That’s the “growth” part from a capital perspective, which is the “capital” piece of growth capital.
We have a very flexible approach. We’ll make some large investments where we might take more than 50% ownership, but we also do a lot of deals where we are a minority investor with a sizable stake in terms of a shareholder in the business.
We’re active, and we’re engaged. It’s not the passive traditional growth equity playbook that we’re pursuing. It’s certainly not the large-scale control, lots of financial engineering, and leverage approach that you would see in the private equity world.”
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