dividend recapitalization

Definition

A method employed by private equity firms and venture capitalists to generate a cash return on investment from an otherwise illiquid position in a privately-held business. It involves the financing of dividend payment s through loans which won't impact the equity stake of private investors.

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You should try and break down the dividend recapitalization so that you know where your money would be best invested.

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The dividend recapitalization that Steve was trying to enact would allow him to get some much needed cash to expand his surfboard factory.

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Those VCs always figure out a way to get cash out of a firm, usually by utilizing dividend recapitalization to provide cash without impacting shareholder equity.

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