Corporate Finance Division
Defense (&Arms) Industry Venture Capital
The defense industry is comprised of research, development, production, and service of military materiel, equipment and facilities which are used for the protection of the properties and people of a nation or a specific area. The defense industry primarily focuses on the resistance and prevention of attacks from enemies, however military weapons for offensive purposes can be used for defensive purposes as well.
The Defense industry is divided into government and commercial suppliers. It includes defense contractors, business organizations and individuals supplying products to military. The arms industry produces ammunitions, guns, military aircrafts, missiles and associated consumables.
The arms industry manufactures weapons and military equipment, and is a global business. Arms companies are also referred to as defense contractors, and produce arms and ammunition mainly for the military of a country. Departments of government also play an active role in buying and selling weapons, ammunition and other military items. Products include, (but are not limited to) ammunitions, guns, missiles, military aircraft, military vehicles, electronic systems and more.
The arms industry also provides other operational and logistic support.
From 2004 to 2013, private equity invested more than $30 billion in 358 U.S. aerospace and defense companies, according to data supplied by the Private Equity Growth Capital Council.
Fostering Growth without Diluting Equity:
For Defense Industry companies at critical stages of development, debt can serve as a key financing option to foster growth, with minimal dilution of equity ownership. At Synergy Capital Markets, not only do we understand the industries of our portfolio Defense Industry companies, but we also understand the growth process - and occasionally the growing pains - they undergo.
When venture debt is used appropriately, we believe entrepreneurs gain the following benefits:
Able to raise capital in a way that benefits the team and the business as a result of the greater flexibility offered by venture debt than traditional forms of debt financing
Have more time between equity rounds to build the business and achieve critical milestones, which creates potential for greater valuation
Retain a larger ownership stake in the company prior to an IPO or other liquidity event
Achieving milestones quickly in many cases also means reaching the IPO stage more rapidly