The term venture capital covers a part of the private equity business. While the latter generally refers to trading in equity shares in unlisted companies, venture capital is the temporary transfer of funds in the form of equity to the special segment of young growth companies.
Venture capital is temporary equity investments in young, innovative, unlisted companies, characterized by inadequate profitability paired with an above-average growth potential. The venture capital business represents a sub-area of the private equity business, by which one understands the trading of equity shares in unlisted companies. The focus is on achieving a maximum increase in value, which at the time of the exit largely determines the return on investment. The venture financiers not only provide capital to young growth companies, they also support them with various advisory services. This is often of decisive importance for a successful company development, since the mostly technical or scientific company founders typically lack management experience and business knowledge
The investment concept of Tomas Schwarz Capital focuses on companies that have sustainable solutions for future problems. It is important to us that the solutions are in line with the values of TSC. We do not only look at the companies, but especially at the people behind the companies, because they determine the course of success.
Private equity (over-the-counter equity or private equity) is an alternative investment option that involves capital that is not publicly listed on traditional stock exchanges. The private equity market operates through investors and funds that invest directly in private companies, participate in public company acquisitions, or bring in venture capital. In private equity investing, private and institutional investors provide funds that can be used to finance the development of a new technology, restructure companies and improve their profitability, make some effective acquisitions, or convert a public company into a private one.
Our private equity investment approach is based on an analysis of the relative attractiveness of different sectors, industries and regions in order to identify opportunities for investments in these specific markets. Within these markets, our local investment advisors then look for companies with strong growth figures that can benefit from our participation.
Our Industry Value Creation team supports value creation by implementing strategic initiatives and operational improvements. The team has specific expertise in various sectors from which our portfolio companies can benefit. The specialization covers the following sectors: healthcare, retail (digitization), media and telecommunications, information technology, industry, infrastructure and energy, financial services and real estate.
In the global private equity market, our investment strategy focuses on three key topics:
We acquire platform companies or systems with a competent management team and infrastructure in a highly fragmented market in order to then expand the platform by purchasing add-on companies and benefit from synergies.
We acquire companies in sub-segments of specific industries in order to benefit from particularly strong products and services and to demonstrate the ability of disproportionate growth, often through internationalization. We institutionalize the company and expand the range of products and services.
We acquire companies and systems on an independent basis, such as typically individual systems with value creation potential, strong defensive skills, high cash flow generation and the ability to quickly reduce debt. We intend to expand their network and strengthen their position.
EARLY STAGE INVESTOR
The seed phase (seed = "sowing") is the name given to financing with equity capital in the pre-foundation phase and in the start-up phase. Companies in the seed phase generally do not receive bank loans because they do not have any collateral. Bank loans are only granted to these companies if the founders, as a private person, are personally liable with their assets (e.g. house, condominium) and provide this as security for the bank loan. The financing in the seed phase aims to develop a prototype and enable the company to be set up.