This Ultra-High Dividend Stock Pays You Almost 12% to Own It. It Can Be Yours For Less Than $20
When it comes to investing in high-profile start-ups, most investors probably think these deals are reserved for venture capital and private equity. However, the capital markets present some unique ways for retail investors to gain exposure to young tech companies with the potential to make it big. Business development companies (BDCs), in particular, are unique investment structures that allow investors to invest in vehicles that provide capital to high-growth businesses that may still be closely held.
One of the best-performing BDCs on the market is Hercules Capital (NYSE: HTGC), which specializes in venture debt and growth capital for technology and life sciences businesses. Let's take a look at what exactly Hercules does and why the stock may be appealing to dividend investors.
BDCs act as capital providers for companies seeking different ways to augment the balance sheet. For example, during the early days of a start-up, the company may raise several rounds of funding from venture capital or private-equity investors. However, over time, the founders and employees may not want to raise money from these investors due to equity dilution. Therefore, the start-up may look at an alternative, such as raising debt.
Source Fool.com
