Mezzanine Development Capital
This is financing of established businesses which have overcome the extremely high risk early stage, have recorded profits for a few years but are yet to reach a stage when they can go public and raise money from the capital market conventional sources.
Among the uses of such types of venture capital financing are purchase of new equipment plant, expansion of marketing and distribution facilities, refinance of existing debt, penetration into new regions, induction of new management and so on. The development finance stage has a time frame of one to three years and falls in the medium risk category, it constitutes a significant part of the activities of many VCIs.
This finance by VCIs involves low risk perception and a time frame of one to three years. Venture capital undertakings use such finance to expand business by way of growth of their own productive asset or by the acquisition of other firms assets of other firms. In a way, it represents the last round of financing before a planned exit.