Gladstone Investment operates as a business development company and buyout fund that acquires majority ownership in lower middle market private U.S. businesses. Unlike most BDCs that act solely as lenders, Gladstone Investment provides the entire capital stack for its portfolio companies, functioning as the private equity sponsor. The company targets established, cash-flow-positive businesses with EBITDA between $5M and $25M across diverse industries, including machinery, aerospace and defense, and diversified services. Its business model generates income through two primary streams: interest income from debt investments and capital gains from equity exits. Debt typically comprises approximately 70% of an investment at cost and consists of variable-rate loans with interest rate floors to protect yield. Equity accounts for the remaining 30% of each investment, enabling the company to pay supplemental distributions to shareholders when exiting a portfolio company through sales or mergers. Externally managed by Gladstone Adviser, the company operates as a regulated investment company and distributes its taxable income to shareholders. Gladstone Investment grows through new buyout investments and add-on acquisitions, which it funds using a revolving credit facility, publicly traded notes, and equity issuances.