Private Equity and Venture Capital in Europe

15.2. The Cluster of Financing Growth Deals

Expansion financing includes all risk capital invested in already existing and established companies used to incentivize development, dimensional growth, and potential quotation in a public financial market. This type of participation is less risky than those in the initial and start-up phase of a company, because there is already a tested and well-functioning company with a good base of customers. There is less difficulty valuating these investments because the venture capitalist is able to consider the company’s historical data and economic information; conditions that are impossible to satisfy in seed and start-up financing operations. In Europe, investing in expansions is the most important private ...