High Irr Expectations for Growth Equity
Fund: Highland Capital Partners
Posted by Anonymous on 2008-05-01
Our company pitched Highland Capital Partners on an investment opportunity in the digital media space. Our deal fit nicely within their venture growth equity criteria, however, their return expectations far exceeded what one would see with a traditional private equity firm. Highland was seeking an IRR of 40% to 45%, which is in the venture range, while a private equity firm would likely target an IRR of 25% to 35%. So what does this mean for your deal" It means that they are eating your lunch (in other words, it is coming out of your potential return). Highland is another example of a venture capital firm that wants to be a private equity firm. This leads to them to look at growth equity deals, but they are really still seeking a venture return.
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