You probably have a income producing company that’s been operating for a few years, and also you’re fascinated about taking it via to the next stage of development – whether or not it’s some cash injection or a whole overhaul – then consider looking into partnering with a private equity investor.
To begin with, what’s ‘private equity’? Briefly, it’s finance provided by buyers in change for an equity stake in the company. This type of funding is generally related with mature companies with progress potential that need regeneration. A wide range of business sectors benefit from PE such as technology, industrial, healthcare, banking and finance and more.
Persons are usually confused concerning the distinction between private equity and venture capital. Venture capital is actually a form of private equity however the main difference is that it tends to fund younger companies reminiscent of start-ups and rising companies.
Now that you just know a little bit more, do not stop there – there’s loads of resources out there that will educate you all it’s good to know about private equity funding. This is only the beginning.
As soon as you’ve finished some more research, let’s take you thru what you would need to do to accumulate this type of funding on your company. The first thing you’ll need to do to start your journey is to interview potential investors.
We understand how complicated it is to search for the correct investor, so we have listed some key questions you need to ask when looking for the right investor to partner with for the long-term:
How a lot management will administration and shareholders have?
Will there be observe-on investments? If that’s the case, what are the terms?
How experienced are the private equity firm in your sector?
Who are the main points of contact?
What will occur if either party desires to exit the deal?
What prices will the business be accountable for?
What is the investment horizon?
What does capital structure look like?
As well as having these questions, we recommend that there’s always a very good lawyer present to negotiate on your behalf. You will need to find a law firm with expertise not only in private equity investment, however they need to also have the commercial expertise to be able to put themselves within the position of the administration or founder. Select your lawyers with care and look out for unbiased references.
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