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Venture capital and buyouts

Growing when funding is a key factor.

Venture capital is an investment formula intended for companies with major growth potential with funding needs that prove to be a hurdle risking the company's sustainability.

The primary goal of this source of funding is to act as a lever for growth and generating value for the company, whereby once matured and stabilised, the investor will reap profit and the company's value will have increased thanks to the investment made.

However, it is highly important to be able to negotiate and lay the foundations for smooth relations between the parties from the outset, maintaining them throughout the investment period, suitably reflected in agreements that will govern the future activity in the medium-term and defining a suitable exit strategy for the investor, among other areas.

Venture capital can prove to be an alternative when any of the following circumstances arises:

  • Divestitures of multinational groups, “carve outs” or family companies.
  • Ownership succession processes.
  • Business expansion through strategic and operative changes.

There are a number of different operations that lead to venture capital, including:

A management buy-in supported by a capital investment company.

The purpose of such an investment is for the managers to form a managerial team backed by a financial investor, giving the company leverage to pay part of the cost of the operation.

A management buyout supported by a capital investment company that will normally facilitate the investment, giving the company leverage to pay part of the cost of the operation.

A combination of MBO and MBI; a company buyout by its managers and people unrelated to the company.

An investment process to purchase competitor companies to promote a sector build-up process.