Adams Street Partners has published their analysis forecasting a resurgence growth equity. A confluence of the valuation reset towards the end of 2022 delaying fundraisings, the maturation of early-stage ventures into the growth stage, and a diminishing presence of non-traditional growth equity players has created an unprecedented demand-supply imbalance. The scales have tipped in favour of growth stage companies, setting the stage for a fertile investment environment in contrast to 2023, which saw a marked scarcity of exits in this space. This made Frog’s exit from Evotix all the more rewarding and we were delighted to be nominated for Small-Cap Deal of the Year by Real Deals.
However, the article also urges investors to navigate potential pitfalls in this burgeoning landscape. Robust economic conditions of the past decade may have buoyed growth equity managers, but changing economic climates demand a discerning eye. The piece outlines essential diligence measures, emphasizing revenue growth, scale, cash runway, and deal terms, as key indicators of a growth equity manager’s resilience. Against the backdrop of technological innovation and a burgeoning demand for growth capital, Frog Capital’s successful exit exemplifies the promise and potential rewards in this exciting phase for growth equity.
