Many founders who approach us want capital for expansion and have no wish to sell their company. A minority investment can suit them well.
At Fortpark Group, our stake depends on the stage of the company, whether that be a share of a funding round to a larger minority position. The founder keeps operational control, while we agree information rights and, where our holding justifies it, a board seat or observer role. Consent rights usually cover major decisions such as large acquisitions, new debt, senior appointments and changes to the business plan. Those rights deserve careful negotiation on both sides.
Valuation in a minority deal reflects the rights attached. Investors accept a smaller say over daily decisions in exchange for protections such as anti-dilution terms or guaranteed board representation.
Minority capital works best when the company has a defined use for it. Opening a new country, acquiring a competitor, launching a product line or investing in a sales team are typical examples.
Founders should also agree the exit route at the outset. A minority investor needs a path to liquidity, usually through a later sale or a buyback by the founder.
Our minority investment in a UK payroll software provider shows how this works in practice. The founders kept majority control and used our capital to open a sales office in Munich.