Use Cases for PCA's Financing Solution
PCA provides tailored liquidity solutions for individuals who wish to unlock the value accrued in their private ownership interests. Borrowers may include entrepreneurs, investors, independent private equity sponsors, operators, real estate developers, or anyone with private assets who wishes to finance a strategic investment. Some examples of the possible uses of proceeds are listed below.
Financing for Acquisitions
An entrepreneur who wishes to make an acquisition may want to personally contribute more equity to a particular deal. By leveraging personal assets, the entrepreneur can limit dilution or increase ownership in a given transaction or ongoing program of acquisitions.
One or more partners in a business who wish to use the value they've accrued in their ownership of the business and/or other assets may utilize funds from PCA to finance a buyout of one or more other partners.
New or Early-Stage Ventures
Entrepreneurs or investors in early-stage companies may wish to minimize the onerous dilution that comes with raising venture capital. By utilizing their existing portfolio of investments, they can contribute more cash out of pocket to minimize dilution, increase their ownership stake, or otherwise self-fund some portion of a new venture's development.
Real Estate Developer / Investor Financing
Real estate professionals often use many layers of financing to capitalize a particular project. By leveraging their ownership in an existing portfolio of assets, PCA's solution would enable a real estate entrepreneur to personally contribute more equity capital to future projects, thereby increasing their ownership.
Bridge Financing
Entrepreneurs or investors who have an anticipated liquidity event on the horizon, whether via sale, IPO, or recapitalization, may have a near-term liquidity need but do not wish to sell shares in advance of the planned liquidity event. By borrowing personally, secured by their private, illiquid ownership interests, these individuals can avoid what would otherwise be an expensive early sale of an asset.
Growth Capital
Entrepreneurs or investors who wish to fund the general growth strategy of a business may prefer to fund growth with personal liquidity in order to maintain voting control, limit dilution, or because of the high economic cost of equity capital or subordinated debt. In such cases, these individuals can leverage the value of their stock or other assets in order to fund their company's growth themselves.
Independent private equity sponsors who have developed a track record but are not yet ready to raise a committed capital vehicle may wish to have liquidity available to compete on new deals. PCA's solution can serve as an NAV loan against the independent sponsor's existing portfolio in order to provide them with liquidity to contribute as equity to new deals and move much more quickly on transactions where time to close can often be a competitive advantage.
Capital Call Financing / LP Liquidity
Limited partners in private investment funds may have built substantial value in their investments but may not have the liquidity on hand to participate in capital calls or other investment needs they may have. PCA's solution in many cases may provide access to the liquidity needed to meet capital call obligations or to fund other strategic investments.