What Is Patient, Minority Growth Capital?

You’ve started your business with a lot of hard work, sweat, and sacrifice – and that dedication has finally paid off. The time has come for your business to expand, but you’re worried that getting an investment means giving up control. What if there was another way to grow your business – a way that allowed it to grow while you remained at the helm?

Patient, minority growth capital may be the solution you’ve been looking for. Here’s what you should know about this particular growth fund so that you can decide if it’s right for you and your business.

Canadian Business Growth Fund (CBGF)

Until recently, Canadian entrepreneurs have experienced difficulties securing the necessary capital to fund their business’s growth. Many times, business owners ended up having to give up control of their company upon obtaining capital.

That started to change in 2017 when the Minister of Finance’s Advisory Council for Economic Growth brought forth a recommendation to launch a private sector-led growth fund. The Canadian Business Growth Fund (CBGF) aims to provide investments between $3 and $20 million to ambitious entrepreneurs seeking capital for a growth opportunity.

Canadian banks and insurance companies support this independent, evergreen fund. Starting with an initial capital commitment of $545 million, the investment fund is projected to eventually increase to $1 billion.

Qualifying for CBGF

CBGF is suitable for established, high-growth Canadian businesses generating $5 million or more in annual revenue. The company must have a demonstrated business model and a clear vision for growth.

Depending on a company’s individual needs, the investment horizon time fluctuates – which is why it’s known as patient. In some situations, CBGF is a partner for five or ten years, and sometimes the timeframe is even longer. Without having a restriction of an end date, companies can focus more on business growth than exit timelines.

Regarding the term minority, CBGF does not seek a controlling position in companies. Instead, the fund controls between 10 and 40 percent of the company, leaving entrepreneurs in control.

Besides receiving long-term, patient, minority capital, businesses who have partnered with CBGF will be privy to its talent network of business experts who offer support, guidance and expertise to help their companies expand. Business owners learn how to overcome critical knowledge and address talent gaps while remaining focused on business goals.

Benefits of Growth Capital

CBGF helps contribute to a vibrant, innovative, and diversified economy while creating a healthy ecosystem of innovation.

Entrepreneurs no longer face two difficult decisions when contemplating business growth: giving up control of their business or looking for an investor south of the border. Instead, they can achieve their full potential and make significant contributions to productivity, employment, exports, and growth with the CBGF made-in-Canada solution. The fund supports Canadian mid-market companies to become strong and respected marketplace leaders on the global stage.
Most importantly, CBGF helps build a reputation for Canada as a location to grow a business – rather than only start a business.

Are you looking for additional information on CBGF’s investment opportunity? Contact us today to learn more.