How To Leverage the Power of Private Investments To Accelerate Your Growth

Private capital is now a large component of broadband construction and expansion plans. Private equity and institutional investors are looking for stable, long-term cash flows, which broadband and fiber infrastructure can offer.

Recent examples highlight how private capital is stepping in to not only accelerate new network builds, but also to revitalize and accelerate fiber in formerly staid networks. For example, Apollo purchased the assets of Embarq to create Brightspeed, which will focus on accelerated fiber-based service to more than 3 million subscribers, with private capital providing over $2 billion in investment. Ziply Fiber also purchased Frontier assets with private capital and is pushing fiber hard in the existing footprint and beyond, with over $1.2 billion in private investments to date.

But it is not just large deals like these that are being supported by private capital. Smaller companies are also being fueled by smaller amounts of private capital, with broadband companies like Live Oak, Race, and Allo receiving private capital to aggressively push their organically created businesses. For the earliest stage of broadband startups, private capital from venture capital is also pushing new investments in the space, with 91 venture capital deals being done in 2021 in the broadband space. The addition of government subsidies makes deals in this space generally more attractive, as it creates non-dilutive leverage for investors—further enhancing the attractiveness of the space.

Calix is here to help you have any level of discussions with possible private capital partners. If you lead a rural broadband service provider (BSP) and want to sit down with a fiber-savvy private equity firm to explore the possibilities for , here’s what you can expect.

• Faster funding: Grants are a powerful tool for moving rural projects forward. That said, the application process is expensive, can take a long time, and sometimes leave funding gaps. By contrast, I’ve seen BSPs get full funding within 45 days after a standard due-diligence period. None of them had to wait for an application window to begin.
• No-risk meetings: Private investors are eager to meet with BSPs, regardless of where you may be in the process of exploring or expanding broadband. Initial conversations are a meet-and-greet, not a high-pressure discussion.
• Interest in long-term plans: Private investors aren’t interested in funding one neighborhood here or there. They want to hear ambitious visions to scale up and increase your market share with a repeatable business model.
• Ongoing support: As you leverage investments for growth, private investors will be eager to provide more broadband funding—no painstaking government application process required.
• Equity or debt options: There are many ways to structure partnerships. Typically, companies interested in growing through an investment phase will seek an equity investment; however, if the company would prefer a debt arrangement, that is also an option—as is a combination of both.
• Expert support: Many private investors seeking these opportunities have years or even decades of experience in the telecommunications industry. You’ll benefit not only from their dollars but also their fiber-network build-out expertise as you work together to make your projects a success.

Taking the No-Risk First Step To Explore Private Equity for Broadband Funding

Private investments can complement the funding and cover government funding gaps or be leveraged separately from government funding, to allow you to scale growth faster. Government funding and private capital are therefore not an “either/or” proposition but, rather, another source of building your financial syndicate.

If you have any interest in growth and expansion, now is the time to meet investors. Private investors are eager for introductions to BSPs in any stage of exploration to discuss new startups, asset acquisitions, or fiber overbuilds—be they greenfield or brownfield plans.

Want to know how new funding opportunities can help quickly grow your organization? Schedule a funding consult today.