The Blaine Group, Inc.
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8665 Wilshire Blvd., Suite #301, Beverly Hills, CA 90211
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FOR IMMEDIATE RELEASE: JUNE 29, 2009
FOR FURTHER INFORMATION, CONTACT:
The Blaine Group
310.360.1499 Fax: 1498
WILL VENTURE DEBT REPLACE THE TRADITIONAL VENTURE CAPITAL MODEL?
Newport Beach, CA… While the traditional venture equity model is not performing as well as it did, venture debt is developing a growing market share of private capital investments.
No doubt that’s why venture debt has grown from one percent of venture capital deployed in 2001 to 7 percent in 2006, 10 percent in 2008, and expected to grow to 20 percent in by the close of 2012.
This has lead some to speculate that the venture capital industry is dead, or that the venture capital model is broken. Moreover, current economic conditions have opened vast opportunities for distressed debt financings. Competition for premium deals is at an all-time low, and the inventory of available investment prospects is high.
Should accredited and institutional investors look to venture debt as a viable alternative investment in today’s market? There are some reasons to consider it, according to John R. Nelson, a managing director of California Capital Partners, LLC. They include:
- Expanding segment of private capital investing that is still growing
- High velocity of capital; that is, a return of capital usually in less than 48 months
- Senior investment position
- Risk is often offset by collateralized security interests
- Equivalent to composite venture capital rates of return
California Capital Partners, LLC (“CalCap”) operates from a merchant banking platform that does: 1) Agent investing (investment banking and advisory); 2) Principal investing (funds management); and, 3) Financial consulting. It has managed capital in Limited Partnerships (institutional funds, corporations, family offices, and high-net worth individuals) for optimized capital gains through private equity investments such as venture debt and venture capital. Its financial advisory services also includes interim management assignments for client and portfolio companies. CalCap’s leadership consists of principals that collectively have over 100 years of executive management and investment experience. They have completed over 300 capital transactions totaling over $2 billion over the past 25 years, and have achieved investment returns in the top decile of their industry. The common bond within the CalCap team is the persistent desire to build successful businesses and help skilled, dynamic entrepreneurs. The URL is www.calcappartners.com.