Our goal is to enable and participate in the growth of the portfolio company, while structuring a balance sheet that can support growth.
In addition to subordinated debt investments, Ironwood Capital often makes investments in the preferred stock of a company to optimize the capital structure and participate more fully in the success of a company. We see preferred stock investments as an opportunity to more closely align our interests with those of our portfolio companies and management teams. Our objective in these transactions is to enable and participate in the growth of the portfolio company, while reducing a company’s debt load and fixed interest payments.
Preferred stock often serves as a complement to subordinated debt, providing junior capital between common equity and senior debt that does not place as much of an on-going cash burden on the company. Preferred stock is junior to subordinated debt and is somewhat more dilutive to the common shareholders, but less dilutive than common stock.