We raised Scaleworks Fund I, a $60m first fund, and called it ‘Venture Equity’. Here’s what we mean by the term Venture Equity and where we see it in the world of equity finance.
Venture capitalists back high risk companies and can tolerate these failure rates because the winners deliver such outsized returns. It’s very much a zero sum game and many businesses that could have thrived over time, get pushed to grow too fast and find a huge market.
Private Equity firms are buyers more so than investors. Private equity firms are often looking for “safe bets” that can generate cash over time with minimal investment in growth.
Scaleworks looks to acquire proven software businesses that have significant growth potential, sustainable over time. We think it’s an incredibly exciting time to be scaling software companies; that the VC business model creates deal flow for us; and that the size and stage of companies we acquire are generally unattractive to strategic buyers or traditional private equity funds. Scaleworks acquires otherwise under-appreciated product focused companies and turns them into high growth businesses.