Manufacturing is a sector that typically requires a lot of scale-up costs, from labour to equipment to marketing, before a business can become profitable. Likewise, if a manufacturing company is looking to expand its client base, move into other markets, or deliver new products, there are usually upfront costs involved before the business will see any profit from these new avenues. This can put some manufacturing companies in a difficult position: they need to grow to become more profitable but require more money before they can grow.
Minority growth capital is, therefore, a very attractive option for many manufacturing companies. By way of example, in 2021, Stephano Group Ltd, a Canadian, family-run, consumer packaged food manufacturer, leveraged minority growth capital from CBGF to take their company to the next level.
What is minority growth capital?
Minority growth capital is defined as funds provided by an external party (typically an investor or investment firm) that goes directly towards the growth of the business. Since the investor is a minority partner, the company owner(s) or founder(s) still retains control (more than 51% of the business) over how the business is run, but they gain the funding they need – as well as additional expertise and business connections from the investor – to grow their business.
Why minority growth capital?
There are several advantages to choosing minority growth capital when you are ready to expand your manufacturing business. For starters, this form of capital allows you to get the funds you need without incurring more debt to the company and without giving up controlling interest.
Minority growth capital can be used for you to expand your business. For example, as a manufacturer, to produce more goods or expand your SKU offering, you may need to hire additional personnel or upgrade your equipment. Perhaps moving to a larger facility or investing more in your sales and marketing team is necessary. If you do not wish to incur subsequent debt to do these things, then minority growth capital could be the right option for you.
And if your minority growth capital comes from a firm such as CBGF, you can also get access to expert advice to help you put those funds to where it will most benefit your business and help you achieve your growth goals.
Contact CBGF today.
If you are an entrepreneur of a manufacturing or family-run business that you would like to grow and you think that minority growth capital might be the right choice for you, we would love to hear from you. Contact us today to schedule an introduction with one of our investment partners.