If you have an income-generating business that has been operating for a couple of years and are interested in taking it to the next stage of growth, be it a cash injection or a full overhaul, consider partnering with a private company. equity investor.
First of all, what is “private equity”? In short, it is 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 industrial sectors benefit from PE, such as technology, industry, healthcare, banking and finance, and more.
People are often 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 startups and startups.
Now that you know a little more, don’t stop there – there are many resources available that will teach you everything you need to know about private equity financing. This is just the beginning.
Once you’ve done a little more research, let’s take a look at what you need to do to acquire this type of financing for your business. The first thing to do to start your journey is interview potential investors.
We understand how complex it is to find the right investor, so we’ve listed some key questions to ask yourself 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 subsequent investments? If so, what are the terms?
-
What experience does the private equity firm have in your sector?
-
Who are the main points of contact?
-
What will happen if either party wants to get out of the deal?
-
What costs will the company be responsible for?
-
What is the investment horizon?
-
What does the capital structure look like?
In addition to having these questions, we recommend that you always have a good attorney present to negotiate on your behalf. You’ll want to find a law firm with experience not only in private equity investing, but they must also have the business experience to be able to put themselves in the position 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 external investors, such as investment committees or banks. This ensures faster operational processes and direct communication without having to consult with all outside investors, which is typical of a traditional private equity arrangement. If you want to know how we can help your business prosper, visit our website and get in touch today.