WHAT IS MEWA CAPITAL?
Mewa Capital is a form of capital provided to early-stage and high-growth companies. The key characteristic of Mewa Capital is the high level of risk associated with the investments. Mewa Capital firms are a very important source of funding for new businesses, because small businesses usually do not have access to capital markets (too small) or bank debt (too risky).
- Where does the money come from?
Independent Mewa Capital firms are essentially pools of money coming from wealthy individuals. These individuals are often successful entrepreneurs who have cashed out of a business and would like to reinvest their cash in sectors they know well. The money is typically managed by a team (ex-entrepreneurs, consultants, bankers, or industry experts) who will spend time looking for fast growing business.
- How do they make money?
Mewa Investors spend money in business with the hope of selling them in a few years' time at a substantial profit (reaping many times the initial investment), either to another MC&C fund, to another company. MC&C Investors add value to the companies they buy not only by giving them access to cash, but also by providing them with specific expertise and giving them access to their large networks and contacts in the industry.
- How is Mewa Capital different from Private Equity?
Private equity firms invest in stable companies using a lot of debt, and typically want a majority or controlling stake. The private equity firm aims at a two to three times’ return on their initial investment. Mewa Capital firms invest in high-growth companies using no debt and are usually happy with a minority stake. Mewa Capital aims for a five to ten-plus times return on their initial investment.
- What kind of companies do they buy?
MC&C Capitalists invest in companies across all sectors, but most commonly in the high-growth areas of technology, Internet, or healthcare.
Great management teams. MC&C Investors will always look for smart and very ambitious management teams that will be able to work very hard to make the company succeed.