If you have an income generating business that has been in business for a couple of years and you are interested in taking it to the next stage of growth, whether that be a cash injection or a complete overhaul, then consider partnering with a private company. equity investor
First of all, what is ‘private equity’? In short, it is the financing provided by investors in exchange for an equity stake in the company. This type of financing is generally associated with mature companies with growth potential that need regeneration. A wide range of industry sectors benefit from PE, such as technology, industry, healthcare, banking and finance, and more.
People often get confused about the difference between private equity and venture capital. Venture capital is actually a form of private equity, but the main difference is that it tends to fund younger companies, such as start-ups and start-ups.
Now that you know a little more, don’t stop there – there are plenty of resources out there to teach you everything you need to know about private equity financing. This is just the beginning.
Once you’ve done some more research, we’ll show you what you need to do to acquire this type of financing for your business. The first thing you will need to do to start your journey is to interview potential investors.
We understand how complex it is to find the right investor, so we have listed some key questions to ask when trying to find the right investor to partner with for the long term:
- How much control will management and shareholders have?
- Will there be follow-up investments? If so, what are the terms?
- What experience do private equity firms have in your sector?
- Who are the main points of contact?
- What will happen if either party wants out of the deal?
- What costs will the company be responsible for?
- What is the investment horizon?
- What is the capital structure like?
In addition to having these questions, we recommend that you always have a good attorney present to negotiate on your behalf. You will want to find a law firm with experience in not only private equity investing, but they should also have the business background to be able to step into the role of manager or founder. Choose your attorneys carefully and seek independent references.
Parabellum Investments are specialized mid-market investors who only invest money earned from previous successful investments. Our independent investment fund does not include outside investors, such as investment committees or banks. This ensures faster operational processes and direct communication without having to check with all the outside investors, which is typical in a traditional private equity deal. If you want to know how we can help your business thrive, visit our website and get in touch today.
