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Cypress Growth Capital Closes Third Royalty Investment Fund
Track Record of Investment Success and Distinctive Investment Model Lead to Rapid Close
Cypress Growth Capital is pleased to announce the closing of our third royalty-based growth capital fund, CGC Royalty Investments III, LP. Building on the success of the firm’s prior funds, this $42M vehicle will provide Cypress’ distinctive, equity-preserving form of financing to emerging software and technology-enabled services companies in the Southwest. Investors include a diversified group of premier family offices and select individuals in the technology ecosystem.
“We were well positioned to quickly raise the new fund based on our market-leading position as the largest and most active royalty-based growth capital firm in the United States,” said Bart Goodwin, Co-Founder and Managing Director of Cypress Growth Capital. “With a track record of more than two dozen royalty-based investments since 2011 and consistently successful outcomes for our portfolio companies, our royalty model is a compelling alternative to venture capital and traditional debt options.”
Cypress' royalty-based capital is also attractive to entrepreneurs. “The Cypress investment allowed us to conduct a management buyout of the company, positioning us for our next phase of growth” said Glenn Renner, CEO of HomeSphere, the homebuilding industry’s first and only B2B digital lead generation and customer retention platform. “Their highly flexible, debt-based structure allowed us to maintain our valuable equity, saving us millions in our subsequent sale to a private equity firm.”
Royalty-based growth capital is equally attractive to investors. “We look at hundreds of alternative investment opportunities each year,” remarked Andrew Swartz, Chief Investment Officer of the J. Cleo Thompson Family Office in Dallas, Texas. “What stands out to us about the leadership team at Cypress Growth Capital is their management background in software and technology services. Historically, their funds have generated consistently high returns and the unique approach reduces risk through the rapid return of invested capital. ”
With the closing of the new fund, the Cypress team will continue to offer its deep operating and entrepreneurial experience to its portfolio companies, an important differentiator from other firms who provide just capital.
Investment Profile
Cypress Growth Capital is actively seeking growing companies led by committed entrepreneurs who value their equity. We look for companies with the following characteristics:
- Software or technology-enabled services
- Annual revenue of $3M to $20M
- Profitable or nearing profitability
- At least two years of operating history
- Growth capital needs up to $5M
- Headquartered in the United States
