Fidus Investment Corporation (FDUS): Business Model Canvas [Dec-2025 Updated]

You're digging into how a Business Development Company (BDC) like Fidus Investment Corporation (FDUS) actually makes money deploying capital in the lower middle-market. Honestly, their model hinges on disciplined underwriting, turning a $1.2 billion investment portfolio into real cash flow, like that 13.0% weighted average yield they hit in Q3 2025. It's a tight dance between sourcing deals from private equity partners and managing shareholder expectations for that high dividend income, all while keeping $203.8 million in liquidity ready for the next opportunity. See the full nine-block breakdown below to map out their entire capital engine.

Fidus Investment Corporation (FDUS) - Canvas Business Model: Key Partnerships

Fidus Investment Corporation is an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended.

Financial sponsors (private equity firms) for deal sourcing

Fidus Investment Corporation seeks to partner with financial sponsors to provide customized financing for various transactions. The related entity, Fidus Capital, has made a total of 149 investments.

Management teams and business owners of portfolio companies

Fidus Investment Corporation provides customized financing for change of ownership transactions, recapitalizations, strategic acquisitions, business expansion, and other growth initiatives for business owners and management teams.

Key portfolio statistics as of September 30, 2025, reflect the direct partnership with these businesses:

• Fair value of the investment portfolio: $1.2 billion.
• Number of active portfolio companies: 92.
• Average active portfolio company investment at amortized cost: $12.6 million.
• Percentage of debt investments at variable rate: 72.0%, representing $755.3 million of the debt portfolio at fair value.
• Targeted lower middle-market companies generally have revenues between $10 million and $150 million.

U.S. Small Business Administration (SBA) for SBIC debentures

The SBA's SBIC debenture program provides access to lower cost capital. Fidus Investment Corporation utilizes this program through active SBIC funds.

The standard debenture limit for a single SBIC cannot exceed the lesser of US$175 million or two times the SBIC's limited partners' commitments. Some SBICs are targeting fundraises that could allow for up to US$250 million in SBA debentures if the Debenture Cap is increased.

Fidus Investment Corporation's outstanding SBA debentures as of recent reporting periods:

External manager, Fidus Investment Advisors, LLC, for operations

Fidus Investment Corporation is externally managed. The management structure involves Fidus Investment Advisors, LLC, which handles operations. Total expenses, including the base management fee waiver and income tax provision, were $21.2 million for the three months ended September 30, 2025.

Banks and institutional lenders for credit facilities

Fidus Investment Corporation partners with banks and institutional lenders to secure credit facilities for liquidity and investment capacity. On October 16, 2025, Fidus entered into a special purpose vehicle credit facility with ING Capital LLC.

Details on credit facilities and total debt structure as of late 2025:

• SPV Credit Facility initial commitments: $175 million, with an accordion feature up to $250 million.
• Unused capacity under the credit facility as of September 30, 2025: $125 million.
• Cash and cash equivalents as of September 30, 2025: $62.3 million.
• Weighted average interest rate on total debt outstanding as of September 30, 2025: 4.9%.

Total debt outstanding as of September 30, 2025, was comprised of:

Fidus Investment Corporation (FDUS) - Canvas Business Model: Key Activities

You're looking at the engine room of Fidus Investment Corporation, the core functions that drive its business as a provider of customized debt and equity financing solutions to lower middle-market companies in the United States. These activities are all about deploying capital effectively and managing the resulting assets to generate income for shareholders.

Sourcing and underwriting new debt and equity investments

This is where Fidus Investment Corporation finds and vets potential deals. The activity is focused on companies with reliable cash-generating business models. For the third quarter ended September 30, 2025, Fidus Investment Corporation invested $74.5 million across debt and equity securities, which included one new portfolio company addition. Following the quarter end, management noted they invested an additional $40.2 million in two new portfolio companies, showing the pipeline remains active. The weighted average yield on debt investments was a strong 13.0% as of September 30, 2025.

Managing and monitoring a portfolio of 92 active companies

Active management is crucial for a Business Development Company (BDC) like Fidus Investment Corporation. As of September 30, 2025, the fair value of the investment portfolio totaled $1.2 billion. This portfolio consisted of 92 active portfolio companies and an additional six companies that had sold their underlying operations. The average active portfolio company investment at amortized cost was $12.6 million at that time. During Q3 2025, the company received proceeds from repayments and realizations totaling $36.7 million.

Here's a look at the scale and yield of the portfolio as of the end of Q3 2025:

Structuring customized financing solutions (e.g., first lien, mezzanine)

Fidus Investment Corporation specializes in providing tailored debt and equity solutions, which means the structure varies deal-by-deal. While the Q3 2025 report mentioned one new company, looking at earlier 2025 activity gives you a better sense of the structuring work involved. For instance, in Q1 2025, investments included specific tranches like first lien debt and preferred equity.

• Invested $10.0 million in first lien debt for one new company in Q1 2025.
• Invested $0.7 million in preferred equity for that same Q1 2025 company.
• Invested $15.0 million in first lien debt for another new company in Q1 2025.
• In Q2 2025, an investment included $8.0 million in first lien debt and $1.5 million in preferred equity for one new portfolio company.

Also, as of September 30, 2025, debt investments in 50 portfolio companies bore interest at a variable rate, representing $755.3 million, or 72.0%, of the debt investment portfolio on a fair value basis.

Managing capital structure, including debt issuance and redemptions

Managing the liability side of the balance sheet is key to funding the investments. Fidus Investment Corporation maintains a strong liquidity position to support its activities. As of September 30, 2025, the company held $62.3 million in cash and cash equivalents. Plus, there was $125 million of unused capacity available under its credit facility. Management noted they have been active in managing the capital structure, including issuing additional notes and SBA debentures while redeeming higher-cost debt.

Distributing income to shareholders as a Regulated Investment Company (RIC)

As a RIC, Fidus Investment Corporation must distribute most of its taxable income. For the fourth quarter of 2025, the Board declared total dividends of $0.50 per share, broken down into a base dividend of $0.43 and a supplemental dividend of $0.07 per share. This follows a total dividend payment on September 25, 2025, of $0.57 per share ($0.43 regular and $0.14 supplemental). The company had an estimated spillover income, which is taxable income in excess of distributions, of $39.5 million, or $1.09 per share, as of September 30, 2025.

The adjusted net investment income for Q3 2025 was $0.50 per share. Finance: draft the 13-week cash view incorporating the declared Q4 dividend by Friday.

Fidus Investment Corporation (FDUS) - Canvas Business Model: Key Resources

You're looking at the core assets Fidus Investment Corporation uses to drive its business-the tangible and intangible things it owns or controls that are essential for its value proposition to work. Honestly, for a Business Development Company (BDC) like Fidus Investment Corporation, the balance sheet is the primary resource set.

The sheer size and quality of the deployed capital form the bedrock. As of September 30, 2025, the investment portfolio fair value stood at $1.2 billion across 92 active portfolio companies. This portfolio is structured to generate consistent income, with the weighted average yield on debt investments holding steady at 13.0% as of that date. Furthermore, the portfolio has a strong structural component, with first lien investments making up 82% of the debt portfolio.

The ability to deploy capital quickly is just as important as the capital already deployed. Fidus Investment Corporation maintained a strong liquidity position as of September 30, 2025, totaling approximately $203.8 million for new investments. This liquidity is comprised of several components, which you can see broken down here:

The intrinsic value backing the company is reflected in the Net Asset Value (NAV). As of the end of the third quarter of 2025, the Net Asset Value for Fidus Investment Corporation was $711.0 million. On a per-share basis, this translated to $19.56 per share. This NAV reflects the value of the underlying assets, net of liabilities, and is a key measure of shareholder equity.

Beyond the balance sheet numbers, Fidus Investment Corporation possesses critical structural and human capital advantages. The company operates with a licensed Small Business Investment Company (SBIC) status. This license is a significant resource, allowing Fidus Investment Corporation to access leverage through the Small Business Administration (SBA), which helps enhance its capital base for investments in its target lower middle-market companies.

The execution of this strategy relies on the team. While I don't have a headcount or tenure statistic for you right now, the management team's expertise is evident in their stated focus and actions. The Chairman and CEO, Edward Ross, continually emphasizes the strategy of carefully selecting investments in companies with reliable cash-generating business models and maintaining sound credit quality. This points to an experienced investment professionals and management team capable of disciplined underwriting and structuring deals, which is the intangible resource that protects and grows the tangible assets. The focus is squarely on providing customized debt and equity financing solutions to lower middle-market companies, generally defined as U.S.-based firms with revenues between $10 million and $150 million.

Here's a quick view of the key financial metrics supporting these resources as of September 30, 2025:

• Investment Portfolio Fair Value: $1.2 billion
• Net Asset Value (NAV): $711.0 million
• Total Liquidity: Approximately $203.8 million
• Active Portfolio Companies: 92
• Weighted Average Debt Yield: 13.0%

Finance: draft 13-week cash view by Friday.

Fidus Investment Corporation (FDUS) - Canvas Business Model: Value Propositions

You're looking at the core value Fidus Investment Corporation delivers to its stakeholders, both the companies it finances and the shareholders providing the capital. It's about providing tailored capital solutions and generating consistent, attractive returns.

Customized debt and equity financing for growth and acquisitions is central to the Fidus Investment Corporation value proposition for its customers. Fidus Investment Corporation partners with business owners, management teams, and financial sponsors, offering customized financing for change of ownership transactions, recapitalizations, strategic acquisitions, and business expansion initiatives. The target customer segment is generally defined as U.S. based lower middle-market companies with revenues between $10 million and $150 million.

For shareholders, the primary value proposition is attractive risk-adjusted returns. This is achieved through a dual focus on current income and potential capital appreciation. The company's investment objective is explicitly to provide these returns by generating current income from debt investments and capital appreciation from equity related investments.

The current income generation from debt investments is a key component of the shareholder value. As of September 30, 2025, the weighted average yield on debt investments stood at 13.0%. This translated to total investment income of $37.3 million for the third quarter of 2025.

The potential for capital appreciation from equity co-investments diversifies the return profile. Fidus Investment Corporation has equity investments in approximately 87.8% of its portfolio companies, with an average fully diluted equity ownership of 2% as of September 30, 2025. During Q3 2025, equity investments totaled $4.7 million out of total investments of $74.5 million.

The value proposition also rests on delivering consistent shareholder distributions. In Q3 2025, Fidus Investment Corporation paid total dividends of $0.57 per share, which included a regular quarterly dividend of $0.43 and a supplemental dividend of $0.14 per share on September 25, 2025. The Net Asset Value (NAV) per share was $19.56 as of September 30, 2025, representing a total NAV of $711.0 million.

The structure of the financing itself is a value proposition: flexible capital structures for lower middle-market companies. The portfolio is heavily weighted toward senior secured debt, providing a measure of safety. Here's a quick look at the debt portfolio composition as of September 30, 2025:

The overall offering to shareholders can be summarized by the income and capital metrics:

• Weighted Average Yield on Debt Investments: 13.0% as of September 30, 2025.
• Adjusted Net Investment Income per Share (Q3 2025): $0.50.
• Total Dividends Declared for Fourth Quarter 2025: $0.50 per share.
• Estimated Spillover Income (as of September 30, 2025): $39.5 million or $1.09 per share.

Fidus Investment Corporation aims to be the capital partner of choice by offering solutions that fit the specific needs of the lower middle market, which is definitely a key differentiator. Finance: draft 13-week cash view by Friday.

Fidus Investment Corporation (FDUS) - Canvas Business Model: Customer Relationships

You're looking at how Fidus Investment Corporation (FDUS) manages the relationships with the businesses it finances, and honestly, it's all about deep partnership, not just transactional lending. This approach is central to their business model as a Business Development Company (BDC) focusing on the lower middle market.

High-touch, partnership-focused approach with portfolio companies

Fidus Investment Corporation prides itself on investing with a partnership-oriented approach, using a flexible mandate to deliver custom-tailored financing solutions. This isn't just a slogan; it's reflected in their equity stake and active monitoring.

As of September 30, 2025, Fidus Investment Corporation's investment portfolio had a fair value of $1.2 billion, spread across 92 active portfolio companies. The average active portfolio company investment on a cost basis was $12.6 million at that date. To show commitment beyond just debt, Fidus Investment Corporation maintains equity investments in approximately 87.8% of its portfolio companies, with an average fully diluted equity ownership of 2% as of the end of the third quarter of 2025.

The relationship is active, as seen in the deployment of capital:

• Invested $74.5 million in debt and equity securities during the third quarter of 2025.
• The debt portfolio structure shows 72.0% bore interest at a variable rate as of September 30, 2025, requiring close monitoring of portfolio company cash flows against interest rate changes.
• The weighted average effective yield on debt investments was 13% as of September 30, 2025.

Direct engagement with financial sponsors and management teams

Fidus Investment Corporation explicitly seeks to partner with business owners, management teams, and transaction sponsors. This engagement is crucial because the firm's principals have an average of over 20 years of experience advising lower middle-market companies, giving them an in-depth understanding of the strategic and operational challenges these partners face. The focus is on providing customized financing for change of control, recapitalizations, acquisitions, and growth initiatives.

The pipeline activity shows this engagement is ongoing. Subsequent to the third quarter of 2025, Fidus Investment Corporation invested an additional $40.2 million in 2 new portfolio companies, alongside numerous add-on investments in existing companies. This suggests management teams and sponsors are actively bringing forward opportunities for growth capital.

Investor relations for public shareholders (e.g., earnings calls, webcasts)

For public shareholders, Fidus Investment Corporation maintains a regular cadence of communication to keep them informed about portfolio performance and strategy. This is the formal side of the relationship management.

The company held its Third Quarter 2025 Earnings Conference Call on November 7, 2025, at 9:00 AM EST. During this period, management discussed key financial results, such as the Net Asset Value (NAV) per share of $19.56 as of September 30, 2025. Furthermore, the Board declared total dividends of $0.50 per share for the fourth quarter of 2025, composed of a base dividend of $0.43 and a supplemental dividend of $0.07 per share. This consistent dividend action is a direct communication of management's confidence in the portfolio's cash generation to the investor base.

Long-term relationship focus to support add-on investments

The strategy is clearly geared toward long-term support, evidenced by the focus on providing growth capital to existing partners. Management specifically noted that Q3 2025 investments were heavily weighted toward add-on investments, primarily in support of Mergers & Acquisitions (M&A) transactions. This is a direct result of the long-term relationships built with portfolio companies and their sponsors, allowing Fidus Investment Corporation to be the capital provider when existing portfolio companies look to expand.

The pipeline remains robust, with management anticipating continued activity in add-on investments in existing portfolio sectors. This focus on add-ons, which totaled $37.8 million in net originations for Q3 2025, shows that the relationship extends well beyond the initial closing date.

Fidus Investment Corporation (FDUS) - Canvas Business Model: Channels

You're looking at how Fidus Investment Corporation gets its deals-the actual companies they finance-and how they talk to their public investors. It's all about the pipeline, which is fed by a mix of direct effort and established relationships.

Direct origination efforts by the investment team

The investment team at Fidus Investment Advisors, LLC, relies on its own experience and reputation to source deals directly. This is the proprietary deal flow they aim to maintain. The output of these efforts, along with other channels, is seen in the capital they put to work. For the third quarter of 2025, Fidus Investment Corporation invested a total of $74.5 million in debt and equity securities. This included deploying capital into 1 new portfolio company during the quarter. Subsequent to the quarter end, they invested an additional $40.2 million in 2 new portfolio companies.

Relationships with private equity firms and intermediaries

A core part of the origination strategy is leveraging the advisor's network. They focus on long-standing relationships with private equity firms, middle-market senior lenders, junior-capital partners, and other financial intermediaries [cite: 5 (from previous search)]. This channel is key for deal flow, especially for change of control and acquisition financing. The investment activity in the third quarter of 2025 shows a heavy weighting toward add-on investments, which often support Mergers and Acquisitions (M&A) transactions driven by sponsors. The total portfolio as of September 30, 2025, stood at a fair value of $1.2 billion, spread across 92 active portfolio companies.

The results of these sourcing channels are reflected in the investment deployment metrics for Q3 2025:

• Total Originations (Debt and Equity): $74.5 million
• First Lien Securities Origination: $69.7 million
• Equity Investments Origination: $4.7 million
• Repayments and Realizations: $36.7 million
• Net Originations: $37.8 million

NASDAQ stock exchange for public equity investors (FDUS)

The public market channel allows Fidus Investment Corporation to raise capital and provides a liquid exit/entry point for its shareholders. As of December 3, 2025, the common stock (FDUS) closed at $19.75. The market capitalization around that time was listed as $721,264,322. The average trading volume over the last three months was 241,943 shares. The company's investment objective includes generating capital appreciation from equity investments, which is realized through this public channel.

Investor Relations website for financial reporting and communication

The Investor Relations website serves as the primary hub for official communication and transparency with public investors. Fidus Investment Corporation provided regular updates throughout 2025, including:

• Q1 2025 Earnings Call: May 9, 2025
• Q2 2025 Earnings Call: August 8, 2025
• Q3 2025 Earnings Call: November 7, 2025

The company's investment advisor principals have an average of over 20 years of experience. The website hosts webcasts and replays for these events.

Here's a quick look at the Q3 2025 financial output that these channels helped generate:

Finance: draft next quarter's cash flow projection based on Q3 net originations of $37.8 million by Friday.

Fidus Investment Corporation (FDUS) - Canvas Business Model: Customer Segments

You're looking at who Fidus Investment Corporation serves with its customized debt and equity financing. Honestly, they are laser-focused on a specific niche in the American economy, which is the lower middle-market.

• U.S. lower middle-market companies with revenues of $10 million to $150 million
• Business owners and management teams seeking growth capital
• Financial sponsors needing financing for change of ownership transactions
• Public shareholders seeking high-dividend income from a BDC structure

The profile of the target company is quite specific, which helps Fidus Investment Corporation maintain its disciplined underwriting approach. They aren't chasing the biggest deals; they are serving companies that often get overlooked by larger institutions. This focus is key to their strategy.

Here's a quick look at the quantitative parameters Fidus Investment Corporation generally targets for its portfolio companies, as well as the financial metrics relevant to the public shareholder segment as of the third quarter of 2025:

The business owners and financial sponsors are looking for customized solutions, often involving both debt and equity, which Fidus Investment Corporation provides. For the public shareholders, the appeal is the consistent income stream, evidenced by the declared dividends. For instance, the total dividend paid in the third quarter of 2025 was $0.57 per share, made up of a $0.43 base and a $0.14 supplemental dividend. This focus on current income is central to the BDC structure's appeal to that segment.

The portfolio itself, as of September 30, 2025, consisted of investments in 92 active portfolio companies with a total fair value of approximately $1.2 billion. The weighted average yield on debt investments was 13.0% at that time.

Fidus Investment Corporation (FDUS) - Canvas Business Model: Cost Structure

You're mapping out the core expenses for Fidus Investment Corporation as of late 2025. Honestly, for a Business Development Company (BDC) like FDUS, the cost structure is dominated by expenses related to managing the portfolio and servicing the debt used for leverage. Here's a breakdown of the key cost drivers based on the latest reported figures, specifically referencing the third quarter of 2025 results.

Base management fees paid to the external advisor are calculated based on the average value of total assets, excluding cash and cash equivalents, but including assets purchased with borrowed amounts. For the three months ended September 30, 2025, there was a net increase in the base management fee, including the waiver, of $0.5 million compared to the same period in 2024, driven by higher average total assets. The contractual rate is 1.75% of the relevant asset base. To be fair, the advisor provided a voluntary, non-contractual waiver of $0.3 million for the year ended December 31, 2024.

Interest expense on outstanding debt is a major component, especially given Fidus Investment Corporation's use of leverage. For the three months ended September 30, 2025, interest and financing expenses increased by $1.6 million compared to the prior year period, attributed to both a higher weighted average interest rate and increased borrowings outstanding. As of June 30, 2025, the weighted average interest rate on outstanding debt, which includes SBA debentures and notes, was 4.8%. Furthermore, the company pays a commitment fee between 0.5% and 2.675% per annum on the unutilized commitment under its Credit Facility.

The structure of incentive fees directly ties compensation to performance. The investment advisor is eligible for an Income Incentive Fee and a Capital Gains Incentive Fee. For the three months ended September 30, 2025, the accrued capital gains incentive fee increased by $1.4 million due to a net $6.7 million increase in net gain on investments and realized losses on extinguishment of debt. Conversely, the income incentive fee decreased by $0.8 million for the same period due to lower pre-incentive fee net investment income compared to 2024.

Here's a quick look at the incentive fee structure details:

• NOI Incentive Fee: 20.0%
• Annual Hurdle Rate for NOI Fee: 8%
• Capital Gains Fee: 20.0%
• Incentive Catch-Up Provision: Yes

The table below summarizes the key fee percentages and associated recent dollar movements for context:

Operating expenses like professional fees and administrative costs are also present. Professional fees saw an increase of $0.2 million for the three months ended September 30, 2025, driven by higher legal fees. In the second quarter of 2025, professional fees were up $400,000, primarily related to proxy solicitation expenses for the annual shareholder meeting. Other operating expenses are captured in the general expense reporting, though specific administrative cost breakdowns aren't always itemized in the high-level earnings releases.

Finally, you have costs associated with capital raising and debt management. When Fidus Investment Corporation issued $100.0 million of 6.750% Notes due 2030, the offering expenses were estimated around $1.0 million, with $0.6 million incurred as of March 4, 2025. Separately, in the first quarter of 2025, the company issued an additional $10.0 million in SBA debentures, which carried a fixed interim interest rate of 5.163% until their pooling date in September 2025. These costs are essential for maintaining the leverage that magnifies investment returns.

Finance: draft 13-week cash view by Friday.

Fidus Investment Corporation (FDUS) - Canvas Business Model: Revenue Streams

You're looking at how Fidus Investment Corporation brings in money from its portfolio as of late 2025. The revenue streams are heavily weighted toward debt investment income, which is typical for a Business Development Company (BDC) like Fidus Investment Corporation.

The Total investment income of $37.3 million for Q3 2025 was slightly below the prior year period, driven by a mix of factors across the income sources.

Here's the quick math on the components that made up that total investment income for the three months ended September 30, 2025, based on the detailed breakdown:

The primary drivers of revenue are the interest-bearing assets. You can see the total interest income, which includes the non-cash component, is substantial.

• Interest income from debt investments, including PIK interest, totaled $34.01 million ($30.82 million cash interest plus $3.19 million PIK interest) for Q3 2025.
• Fee income from prepayments, originations, and amendments was $1.32 million for the quarter.
• This fee income specifically showed a year-over-year decline; it decreased by $1.4 million in Q3 2025 compared to Q3 2024, reflecting a normalization after a strong prior period.
• Dividend income from equity investments in portfolio companies was $0.99 million.
• This dividend income also saw a year-over-year reduction, specifically a $0.4 million decrease in Q3 2025 versus Q3 2024.
• Realized gains from the successful exit of equity investments resulted in a total net realized loss on investments of $(1.4) million for the three months ended September 30, 2025.

The total investment income of $37.3 million for Q3 2025 compares to a decrease of $1.1 million when measured against the same period in 2024. Fidus Investment Corporation is definitely seeing volatility in the fee-related income, but the core debt yield remains strong, with a weighted average effective yield on debt investments at 13.0% as of September 30, 2025.

Finance: draft 13-week cash view by Friday.