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Also known as: growth capital, expansion capital

Growth Equity

TechnicalFundraisingFinance

Definition

Growth Equity: Growth equity provides capital to mature companies for expansion—typically late-stage startups with proven business models seeking to scale. Growth equity sits between venture capital (earlier, higher risk) and private equity (later, often controlling stakes). Investments usually mean less dilution than earlier rounds but come with higher expectations.

Example Usage

“Our $50M growth equity round will fund international expansion. We're profitable, so we negotiated minimal dilution for significant capital.”

Common Misconceptions

Growth equity is just late-stage VC. Growth investors have different return expectations and investment criteria.
Growth equity means giving up control. Growth equity typically takes minority stakes; PE takes majority.
Only unprofitable companies need growth equity. Profitable companies raise growth equity to accelerate without sacrificing growth.

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