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Practical Founders Podcast

#123: How Practical Founders Are Winning Big with Growth Equity Funding – Growth Street Partners

Dec 20, 2024
Steve Wolfe and Nate Grossman, co-founders of Growth Street Partners, discuss how growth equity funding enables SaaS founders to maintain control while securing investment. They share insights on the 'learn-it-all' mindset crucial for success, emphasizing adaptability and strategic partnerships. The duo explores how founders can achieve multiple exits while building strong teams for scale. Highlighting real-world examples, they differentiate growth equity from traditional investment routes and stress the importance of founder-investor alignment for sustainable success.
57:37

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Quick takeaways

  • Growth equity funding allows early-stage SaaS founders to maintain control while benefiting from significant investment for expansion.
  • The concept of 'founder market fit' emphasizes the importance of industry-savvy entrepreneurs who understand their specific market challenges.

Deep dives

Understanding Growth Equity Investing

Growth equity investing serves as a middle ground between traditional private equity and venture capital, specifically targeting companies that have already established themselves and are seeking capital to scale. It focuses on providing practical funding for early-stage B2B SaaS companies, typically investing between $5 to $15 million in exchange for 20% to 50% equity. This approach emphasizes the importance of a partnership between the investor and founder, working collaboratively rather than taking full control over company operations. The goal is to enable these founders to accelerate growth while still retaining significant ownership of their business.

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