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Shifting from equity to debtfinancing is not simply a matter of optimizing a firm’s cost of capital, however. In creditor disputes, by contrast, courts tend to limit their role to formal contract interpretation and procedural oversight, often reaching results at odds with both market expectations and notions of fairness.
Widely held concerns about inflation, rising interest rates, and a possible recession combined to slow debtfinancing and deal activity in the first half of 2023. Borrowers deferred new debt deals, delayed planned refinancings, and paused major corporate transactions while waiting for interest rates to top out. more…)
Fuse Brown (Georgia State University), on Wednesday, April 19, 2023 Tags: capital investment , Financial regulation , investors , market power , Medicine , Private equity What The First Universal Proxy Card Contests Say About the Future of Activism Posted by Kai H.E. Hall (Wake Forest University), Erin C.
Growing on your own steam may sound like a risky bet — providing an open window for competitors to overtake you in the market — but even in the tech industry, first-mover advantages are short-lived. But what do you do when you need to extend your startup’s runway so you can scale quickly and capture more of the market?
Over the past few decades, growth equity (GE) has gone from an afterthought to a major asset class for huge investment firms. Some argue that GE offers the best of both worlds: the opportunity to fund innovation and growth – as in venture capital – plus the ability to limit downside risk and invest in proven companies – as in private equity.
New York, New York, June 18, 2025 (GLOBE NEWSWIRE) -- Oak Hill Advisors ("OHA") served as Administrative Agent and Lead Left Arranger for the private senior debtfinancing supporting the acquisition of Tyber Medical, LLC ("Tyber Medical") by Montagu Private Equity ("Montagu").
Since that post, the Delaware Chancery Court has had the opportunity to consider some preliminary issues relating to certain of those jeopardized transactions involving private equity-backed buyers.
Given the growth of private debt funds, new entrants in the market and equitymarkets remaining sluggish, more borrowers are turning to venture debtfinancing, with long-standing venture funds offering flexibility and expertise without the risks of larger banks, says Jennifer Post at Thompson Coburn.
Capital markets drive capital to areas of innovation and positive growth, creating jobs and fueling economies. In the US, capital markets fund 73% of all economic activity. This takes the form of equity and debtfinancing of non-financial companies.
As non-dilutive funding solutions attract more interest from SaaS entrepreneurs, venture capital (VC) investors are seeing an increasing number of startups who have used them for their growth and working capital needs, many times combining revenue-based financing (RBF) with a term loan, or other types of debtfinancing.
The core idea behind relative valuation is to estimate a company’s value by comparing it to similar companies based on how the market prices their financial metrics. EV typically includes Market Capitalization, Debt, Minority Interest, and Preferred Equity, minus Cash & Cash Equivalents. What is EV/EBITDA?
The optimal capital structure of a firm is the right combination of equity and debtfinancing. It allows the firm to have a minimum cost of capital while having the maximum market value. The lesser the cost of capital, the more the market value of the company. Cost of debt. Cost of equity .
The basic theory assumes a perfectly efficient market, without issues of taxes and other financial costs. The first proposition of the M&M says that the value of leveraged firms (capital structure with a mix of debt and equity) and unleveraged firms (capital structure with only equity) are the same.
Mergers and acquisitions (M&A) have long been strategic maneuvers for companies seeking growth, market dominance, or increased efficiency. As organizations embark on these transformative journeys, one critical aspect that demands meticulous consideration is the financing model.
By the end of 2022, add-on acquisitions represented more than 76% of all private-equity-backed buyouts, which was a significant increase compared to a decade earlier. As markets recover in 2024 and beyond, overall private equity deal activity is expected to pick up. This post comes to us from Goodwin Procter LLP.
Traditional financing methods may seem risky or unfeasible when markets are volatile or unpredictable. However, amidst these challenges lie opportunities for creativity and innovation in financing solutions. This form of financing can be handy when traditional debtfinancing is unavailable or insufficient.
“If someone owns a land parcel where data-center development is feasible, then the value of that land is significantly higher than it would be absent that demand,” says Tim McGuire, senior director of Project Finance at Rowan Digital Infrastructure, a developer and builder of data centers in the US.
Over recent decades, and especially since the 2007-2008 global financial crisis (GFC), the corporate financemarkets have changed considerably. First, there is more corporate debt now than ever. billion financing for Finastra and €4.5 billion financing for Adevinta ASA. The private credit market has reached $1.6
Growth and Expansion: If your primary objective is to expand your business and penetrate new markets, your financial strategy should reflect this ambition. Consider options such as raising capital through equityfinancing or securing a bank loan to fund your expansion plans.
fair value accounting) affect equitymarkets, it remains largely unexplored in debtmarkets. In a forthcoming article in the Journal of Accounting and Economics , we study the consequences of accounting quality for debt contracting when banks compete to extend loans.
Although headlines suggest a slowdown in M&A activity, the lower middle market continues to be very active. For entrepreneurs who have been considering “taking some chips off the table” or transitioning ownership of their businesses, despite rising debt costs, financial multiples remain strong in the lower middle market.
Whether your startup just launched, has been in the market for a few years, or has grown to millions in sales, at some point, it will need funding to accelerate growth. Startups have traditionally sold a portion of their company (equity ownership) to a business partner — typically a venture capital (VC) firm — to raise growth capital.
Business acquisition can be a game-changer, opening doors to new markets, technologies, and revenue streams. However, mastering the art of business acquisition involves more than just signing a deal; it requires careful planning, tailored strategies, and astute financing choices.
First, the financing needs to be raised with consideration of the company's operating cash flows. For example, if the business uses debtfinancing, it should have sufficient funds to cover the interest and repay the debt.
This pivot from an inflation-focused stance to one prioritizing employment has opened up a world of opportunities, particularly in the lower middle market. This sentiment, coupled with the rate cuts, sets the stage for a potentially vibrant acquisition market.
Here are some key takeaways in the state of the market for IT services firms for 2023 and beyond : Demand is there but buyers are nervous. Private equity interest in buying tech firms hasn’t waned much. Private equity interest in buying tech firms hasn’t waned much.
Since the global financial crisis of 2007-2008, the corporate financemarkets have been dramatically transformed. Most notable has been the rise of non-traditional providers of debtfinance such as private credit funds, which now aggressively compete with traditional finance providers like commercial banks.
For tech startups that need capital to grow fast when opportunity arises, there are two main funding paths to choose from: debt and equity. Equity funding from angel investors or venture firms, which requires selling a stake in the company in exchange for capital, is seen as high-risk, high-reward, and it comes with a certain prestige.
In the fast-paced tech world, startups and equity dilution are nearly inseparable. Cash-strapped founders can use their equity to raise capital, compensate advisors, and attract the talent they need to turn a clever idea into a successful business. These days, equity capital is as expensive as it is elusive.
Plenty of mainstream sites and services like the Financial Times, Wall Street Journal, Bloomberg, Refinitiv, and Merger Market publish these league tables in different formats each year. League tables are primarily marketing tools for banks. Here are a few examples, which took approximately 1.6 50 transactions), or fees (e.g., $200
Kreos offers growth and venture debtfinancing to companies in the technology and healthcare industries. BlackRock Inc (NYSE: BLK ) announced a deal to acquire Kreos Capital for undisclosed terms. Kreos is headquartered in London and its 45-person team will join BlackRock as part of the transaction.
There are two main categories of convertible instrument: Convertible Notes, a form of debt with interest payments until the point of conversion, and SAFEs which are quite literally simple agreements for future equity. A valuation cap is a ceiling on the price at which the investment will convert to equity. What is a cap?
Modigliani-Miller Theorem in the no-tax world states that the value of a firm is independent of its capital structure, meaning that the mix of debt and equity used by the firm has no effect on its overall value. . . . Firm A has a higher proportion of debtfinancing, while Firm B has a higher proportion of equityfinancing.
Leveraged Buyouts (LBOs) are powerful tools in the financial world, used by private equity firms and savvy investors to maximize returns. Introduction Leveraged Buyouts (LBOs) are some of the most intriguing yet complex mechanisms in corporate finance. Over five years, operational improvements and market growth increase ABC Corp.'
How to Value a Convertible Loan: A Comprehensive Guide Convertible loans are a critical instrument in the financial world, often bridging the gap between equity and debtfinancing. A convertible loan is a debt instrument that includes an option to convert the loan into equity under specified conditions.
Sustainable debtfinancing—bonds issued to support projects that benefit the environment or social welfare—has skyrocketed over the past decade, rising from a niche market to a trillion-dollar business. Corporations may also seek to brand themselves as green, sustainable, environmentally conscious, or socially conscious.
Different types of discount rates such as risk-free rate, cost of equity, or cost of debt, are used contextually in financial analysis. Cost of Equity: The cost of equity represents the return required by equity investors to compensate them for the risk of owning a company’s shares.
The (Likely) Recession and M&A Inflation, rising interest rates, geopolitical conflicts, and continued supply chain constraints have taken their toll on the public markets. The question is especially pertinent on the heels of a record year in the M&A market.
Determining a company’s “Cost of Capital” is vital in corporate finance and valuation, and the Weighted Average Cost of Capital (WACC) provides a specific way of doing so. These costs are then combined into a “weighted average” which represents the overall cost of financing a business.
Determining a company’s “Cost of Capital” is vital in corporate finance and valuation, and the Weighted Average Cost of Capital (WACC) provides a specific way of doing so. These costs are then combined into a “weighted average” which represents the overall cost of financing a business.
Determining a company’s “Cost of Capital” is vital in corporate finance and valuation, and the Weighted Average Cost of Capital (WACC) provides a specific way of doing so. These costs are then combined into a “weighted average” which represents the overall cost of financing a business.
Whether your startup just launched, has been in the market for a few years, or has grown to millions in sales, at some point, it will need funding to accelerate growth. Startups have traditionally sold a portion of their company (equity ownership) to a business partner — typically a venture capital (VC) firm — to raise growth capital.
The idea is not new to encourage companies to increase their capitalization and reduce their bank debt (partly through more recourse to the capital market - CMU project). DEBRA Proposal (« Debt-Equity Bias Reduction Allowance). As always, the best can very quickly become the enemy of the good.
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