Sustained growth requires deep pockets

(IPO). The amount of funding provided in late-stage capital is substantial, often ranging from tens of millions to hundreds of millions of euros.

More opportunities than ever

Late-stage capital allows companies to continue to grow and expand beyond their current revenue, even after they have exhausted their early-stage funding. This can be especially important for companies that are operating in highly competitive markets, are facing significant regulatory or technological challenges or simply want to corner the market before their competitors do it.

Because late-stage companies have already established a track record of success and are often generating significant revenue, the risk associated with investing in these companies is lower than it is for early-stage investment. Oftentimes it’s not a question of failure or success, but rather how big the success will be.

Larger and more established companies with more predictable revenue streams make late-stage companies attractive to investors, as they are more likely to provide steady returns on investment.

If you have created a machine that spits out €5 every time to put €1 into it, you obviously want to feed the machine as many coins as possible.

That is essentially what successful, fast-growing companies are. However, it usually takes time for their successful products and marketing funnels to turn the €1 into €5. This means they need investors with big wallets to keep growing at a high pace - even after establishing revenue and gaining unicorn status.

Huge investments into established, fast-growing companies like this is often referred to as late-stage capital. A company has already achieved significant growth and has established itself as a leader in its industry.

Late-stage capital is used to fund the next stage of growth for a company, which often involves expanding into new markets, acquiring other companies, or preparing for an initial public offering

Late-stage capital can be structured as equity deals or loans and is typically provided by institutional investors, such as private equity firms, hedge funds, or large venture capital firms. Additionally, investors typically provide competencies and networks to the companies they invest in. Therefore, some investors focus on specific industries and typically invest to help with growth activities, internationalisation, generational change, management buyout, turn-around, etc.

While the amount of traditional latestage capital has grown with the startup ecosystem, new opportunities are also on the rise. Opportunities like an IPO at growth or venture stock markets or secondary investors like Nordic Secondary Fund.