Runway Growth Capital is an experienced and reliable source of debt financing for dynamic and late-stage growth companies. To learn more about the firm, Pulse 2.0 interviewed Runway Growth Capital Deputy Chief Investment Officer and Head of Credit Greg Greifeld.
Greg Greifeld’s Background
What is Greifeld’s background? Greifeld said:
“I joined Runway in 2016 as Managing Director and member of the firm’s investment team, with more than 14 years of experience in financial services and growth lending.”
“I began my undergraduate career at 16, earning my bachelor’s degree from Bard College. My roots are in investment banking with my first role at J.P. Morgan, followed by a stint at HPS Investment Partners. In 2020, I was named a rising star by both the Venture Capital Journal and Private Debt Investor.”
“In my time at Runway, I have been proud to help grow our portfolio to over $2 billion across 70+ investments. I lead the team that is responsible for due diligence, performance monitoring, and deal structure of both prospective borrowers and portfolio companies. I’m also proud to hold seats on the firm’s investment committee, amendment committee, and first deal review committee, as well as serve as chairman of the firm’s ESG committee.”
“I’m also currently a member of the Economic Club of New York and serve on the board of directors at Gynesonics, Inc. and Snagajob Inc. (where I’m Chairman) – both of which are Runway portfolio companies.”
Evolution Of Runway Growth Capital’s Thesis
How has Runway Growth Capital’s thesis evolved over time? Greifeld noted:
“As we’ve scaled, we’ve gone from focusing on earlier-stage startups to late and growth-stage companies. If you look at our first couple of loans, one of them was $2 million to a company called Placecast. Another was a $5 million loan to Mojix. We did around $3 million or $5 million to SendToNews Video. When we first started the firm, we were smaller and by nature had to focus on earlier-stage companies; however, as we’ve grown we’ve matured into focusing on later-stage companies with what we believe is a clear path to profitability.”
Challenges Faced
What challenges has Greifeld faced in building Runway Growth Capital? Greifeld acknowledged:
“The biggest challenge with the current macroeconomic climate is that the companies we lend to have uncertainty about their own growth prospects. This has forced them to be cautious about spending capital given the uncertainty of their ability to raise more money.”
“Just as we’re seeing less activity in the equity world, we’re seeing the same in the debt world. Companies are hesitant to spend the money they have, and they’re hesitant to try to raise more capital. So, we’re just seeing an overall slowdown of business. As we anticipate the macroeconomic environment to become more certain, these companies are going to have more confidence in actually investing the dollars that they’ve raised to chase growth. With that, we’ll have more confidence to try to raise more capital.”
“Overall, this dynamic has driven us to be more selective in deploying capital, leading to a significant improvement in the quality of potential deals we evaluate. Our focus on late-stage companies with robust fundamentals has allowed us to pinpoint ventures that promise substantial growth potential.”
Favorite Memory
What has been your favorite memory working for Runway Growth Capital so far? Greifeld reflected:
“I would say my favorite memory is a bit broader than any one particular moment; rather, I’m proud of the growing awareness of venture debt and how the firm has led conversations via research, the media, and other means to advance the conversation well beyond what it was in previous years.”
Significant Milestones
What have been some of Runway Growth Capital’s most significant milestones? Greifeld cited:
“We’ve been fortunate to experience several significant milestones during my time at Runway. One in particular includes the initial public offering of Runway Growth Finance Corp. in 2021 – our publicly traded business development company that launched in 2016 with more than $1BN in assets today. This opened the firm to an entirely new investor class that we hadn’t worked with previously. Another was moving into the life sciences vertical where we began to partner with companies operating at the edge of science and technology in terms of medical breakthroughs.”
“Our strength in the market hasn’t gone unnoticed: Private Debt Investor, one of the highly read publications in our space, has shortlisted Runway Growth Capital as Specialty Finance Lender of the Year for three years in a row (2020, 2021, 2022). It’s a recognition we’re proud to reference as we continue to grow and bring value to our partners.”
Investment Success Stories
Would you like to share any specific investment success stories? Greifeld highlighted:
“One of the significant investment success stories I’d like to share involves Mobius Imaging, LLC. Mobius, a private medical device company operating in the intraoperative imaging space, was seeking capital in November 2018 to bolster its product development, sales, and marketing efforts. Despite being not yet profitable, which often makes attracting lenders challenging, Mobius had tremendous potential and a promising growth trajectory.”
“Recognizing this, Runway Growth Capital structured a deal that provided Mobius with the capital it needed to execute on its plan, increase sales, and boost awareness, without the need for substantial equity dilution. This approach ensured that Mobius’s members were able to maintain their ownership percentages.”
“Less than a year after obtaining their loans from Runway, Mobius Imaging and an affiliate were acquired by a medical device industry leader for a purchase price of up to $500 million in October 2019. By partnering with Runway for a minimally dilutive growth loan, Mobius’s equity holders were spared from giving up a significant portion of the proceeds to new shareholders. Given the short timeframe between the capital raise and the sale of the business, this was a significant achievement for Mobius and a testament to the strategic approach of Runway Growth Capital.”
AUM/Other Metrics
After asking Greifeld about the company’s assets under management and other metrics, he revealed:
“We’ve secured $2.6 billion in total commitments across 74 investments since the firm’s inception.”
Industry Focus
What are some of the industries that Runway Growth Capital is focused on? Greifeld noted:
“Runway Growth Capital is focused on quality high growth potential companies in the sectors we know best, including, life sciences, technology and select consumer service and product industries.”
“In the technology sector, we target industries such as Software as a Service (SaaS), FinTech, Enterprise Tech, EdTech, Artificial Intelligence, Machine Learning, and other tech-enabled industries.”
“In the life sciences sector, Runway Growth Capital invests in biotech and biopharma, medical devices, and other specialty fields.”
“In the consumer sector, we’re interested in select consumer product and service industries, including retail and financial services.”
“In all cases, the companies we invest in are typically based in North America, Europe, or Australia. They provide loans ranging from $10 million to $100 million to fuel growth, extend runway, refinance existing debt, or fund acquisitions.”
Differentiation From Other Firms
What differentiates Runway Growth Capital from other firms? Greifeld affirmed:
“Runway Growth Capital differentiates itself from other firms in several key ways, particularly through our partnership approach and our strong industry reputation:
- Partnership Approach: At the core of our philosophy is a partnership approach, where we work closely with the companies in which we invest. We don’t just provide capital; we aim to be a strategic partner for the companies, helping them navigate their growth journey. We believe in a collaborative approach and work alongside management teams to truly understand their business, their market, and their goals. This allows us to provide not just financial resources but also strategic advice and guidance that make us a valued partner rather than just a capital provider.
- Focus on Late-Stage Companies: While some venture debt firms concentrate on early-stage startups, we strategically focus on late-stage companies with proven business models and strong fundamentals. These companies often have more predictable cash flows and revenue streams, reducing risk and allowing us to provide more tailored financial solutions.
- Industry Reputation: Over the years, we have built a strong reputation in the industry, backed by our team’s expertise, our solid track record, and the success of our portfolio companies. Our name is associated with trust and credibility, and this reputation attracts high-quality deal flow.
- Selective Capital Deployment: Given the current macroeconomic environment, we have become more selective in deploying capital, which we believe has increased the quality of our potential deals significantly. This strategic choice underlines our commitment to investing in ventures that exhibit strong growth potential and robust business fundamentals.
- Dedicated to Education: We are committed to educating stakeholders about venture debt, its benefits, and its distinctions from other forms of financing. This dedication sets us apart and ensures that our partners fully understand the value and role of venture debt in their growth strategy.
- $2.1 Billion in Total Funded Investments: Finally, our milestone of reaching $2+ billion in total funded investments across our platform is a testament to our successful strategy and the trust that companies and investors place in us.
By combining our partnership approach, late-stage focus, strong reputation, and commitment to education, we provide a unique proposition that sets Runway Growth Capital apart in the venture debt landscape.”
Future Goals
What are some of Runway Growth Capital’s future goals? Greifeld pointed out:
“We’d like to essentially kill the IPO market by providing capital for late stage companies that’s significantly more attractive than funding from the public markets.”
Additional Thoughts
Any other topics you would like to discuss? Greifeld concluded:
“Absolutely, looking ahead, I’m interested in exploring what the future holds for venture debt, especially in the context of ongoing technological progress and shifting macroeconomic trends. I’d also like to consider the potential implications of financial regulatory changes on the venture debt industry and how we at Runway Growth Capital are preparing for these prospective shifts.”
“Beyond the technical aspects of venture debt, I’m passionate about supporting new businesses and would love to delve into strategies for nurturing a robust entrepreneurial ecosystem.”
“Lastly, the financial services industry is witnessing profound disruption and innovation due to technologies like blockchain and AI, and we’re interested in and exploring their potential ramifications for our sector.”
