Capital-based

Capital-based refers to something, such as a business, investment strategy, or economic system, that primarily relies on capital – financial assets or resources – for its operation, growth, and success. It emphasizes the importance of accumulating, managing, and deploying capital effectively. This contrasts with systems relying primarily on labor, resources, or other factors. capital-based approaches often prioritize financial returns, investments, and the creation of wealth. Decisions are frequently made by those who control significant capital, thus dictating strategy.

Capital-based meaning with examples

• The new venture capital fund adopted a capital-based investment strategy, focusing on high-growth startups with the potential for substantial financial returns. They aimed to leverage their capital to foster innovation and generate profits, looking to exit within seven years for exponential growth and to keep its investors happy and wealthy.
• The success of the real estate development project was largely capital-based. It required significant upfront investment in land acquisition, construction, and marketing. Without a substantial capital base, the ambitious undertaking could never have gotten off the ground. Investors were wary and demanding.
• Many argue that modern capitalism is capital-based, with wealth inequality resulting from disparities in capital ownership. Those with more capital are better positioned to generate further wealth, creating a cycle. They often prioritize the interests of those who control the capital, and the trickle-down effect.
• The company's expansion plan was capital-based, dependent on securing loans or attracting new investors. They needed to demonstrate a strong return on investment. It required aggressive fundraising efforts and a clear plan of what they would do when they got the capital.
• The banking sector, being capital-based, is highly regulated to ensure financial stability. The amount of capital the banks hold has a direct correlation to the loans it can distribute to the general public. Regulatory requirements are aimed at protecting depositors and preventing systemic risk.