Greybull Stewardship is pleased to announce its first closing of committed capital. I am particularly proud that Greybull was able to gather committed capital through its evergreen fund structure. This structure provides several advantages to Greybull Stewardship, to the companies in which it invests, and to our co-owners in those companies:
- Does not force growth rates upon companies. Because our capital source is evergreen and it does not have a fund termination date, Greybull can be patient and allow a company to execute a growth strategy that is optimal for its business.
- Does not force a sale of our portfolio companies or “exit”. Greybull’s ideal holding period for an investment is forever. We do not want to sell our investments (we also won’t stand in the way if our co-owners determine it is time to sell). Because our capital source is evergreen and it does not have a termination date, Greybull will not force a company to sell its business.
- Allows tax efficient strategies for our portfolio companies and our co-owners in those businesses. Greybull can invest in flow-through tax entities which enables our co-owners to enjoy an efficient tax structure of paying only one level of income tax. Most venture capital and private equity funds cannot do this — they must invest in tax-inefficient C Corporations. Not only do C Corporations create a double tax, it creates a bias toward gambling all financial returns on a perfect sale of the company with perfect market timing. Greybull portfolio companies can earn returns along the way and are not forced to exit until they choose or the market timing is best.
Now, we are off to look for companies that fit our criteria:
- Have consistently earned $500,000 to $5,000,000 in pre-tax profit,
- Have a management team in place with a proven track record with the business,
- Have reasonable prospects for growth — we love growth but do not require high growth rates, and
- Have a desire for a majority or minority (with participation in the large decisions of the company) co-owner in Greybull Stewardship.