You probably have a revenue producing firm that is been working for a few years, and you’re all for taking it via to the subsequent stage of growth — whether or not it’s some money injection or a whole overhaul — then consider looking into partnering with a private equity investor.
To start with, what’s ‘private equity’? In short, it’s finance provided by investors in trade for an equity stake within the company. This type of funding is usually related with mature corporations with growth potential that want regeneration. A wide range of industry sectors benefit from PE equivalent to technology, industrial, healthcare, banking and finance and more.
People are often confused about the distinction between private equity and venture capital. Enterprise capital is actually a form of private equity however the main difference is that it tends to fund younger firms such as start-ups and rising companies.
Now that you simply know a little bit more, don’t stop there — there’s loads of resources on the market that will train you all you should know about private equity funding. This is only the beginning.
Once you have performed some more research, let’s take you thru what you would need to do to acquire this type of funding in your company. The primary thing you will must do to start your journey is to interview potential investors.
We understand how complicated it is to search for the right investor, so we have listed some key questions you must ask when trying to find the precise investor to partner with for the long-time period:
How a lot control will administration and shareholders have?
Will there be observe-on investments? If that’s the case, what are the phrases?
How skilled are the private equity firm in your sector?
Who are the details of contact?
What will occur if either party needs to exit the deal?
What costs will the enterprise be liable for?
What’s the funding horizon?
What does capital structure look like?
As well as having these questions, we suggest that there’s always an excellent lawyer present to barter in your behalf. You will need to find a law firm with expertise not only in private equity funding, but they have to also have the commercial expertise to be able to place themselves within the position of the administration or founder. Select your lawyers with care and look out for independent references.
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