Larkspur Capital’s market focus is emerging growth to mid-sized companies that need to obtain financing to achieve their objectives. These objectives can include growth, later stage venture, acquisition financing, a buyout of a company or division, obtaining partial liquidity for family owned businesses or recapitalization of an existing capital structure. Larkspur works with companies over a broad range of industries including technology, healthcare and traditional industries.
Companies in this category typically have a track record of revenue growth, a product or service in the market, at or near cash flow break even and are typically private. They require expansion capital to fund continued growth, which may come from expanding operations, developing new products or entering new markets. The capital required to take advantage of these opportunities often needs to be in the form of equity capital. Companies in this category typically have no access to the public equity capital markets and have few options to raise capital privately.
Venture capital typically involves earlier stage companies operating in fast growing industries and markets. Companies in this category are typically past the proof of concept, have recently launched a product or service (or are just about to) and are privately held. The company has often been financed with seed or angel investors and investment objectives can include the introduction of a first round of institutional investors or the addition of new strategic investors.
Companies in this category generally have an established track record of revenue growth and profitability and are interested in growing the company through acquisitions. Acquisition finance can be for sponsor groups (typically financial sponsors whose business is to source, acquire and oversee leveraged buyouts) or operating corporations. Acquisition finance typically requires several different types of financial instruments, from senior debt to equity.
Leveraged and Management Buyouts
Companies that are eligible for leveraged buyouts (LBO’s) and management buyouts (MBO’s) can be either private or public and typically have the following characteristics: a strong track record of operations, positive cash flows, established product and/or service offering and a seasoned management team. Financing structures for LBO’s and MBO’s typically include a combination of securities including senior debt, subordinated debt and equity and the amount of leverage that a company can take on is dependent on factors such as industry, profitability, market position and management expertise.
Recapitalizations can be done to provide liquidity to existing investors, restructure a company’s balance sheet following some milestone event (such as an acquisition), take a public company private or lower a company’s overall cost of funds. Companies in this category can be either public or privately held and are generally more established with regard to product and service offering, revenue, cash flow and management track record. Recapitalizations can involve any number of securities and structures including senior debt, subordinated debt, preferred equity or common equity.