If you have a revenue-generating company that has been operating for several years and you are interested in moving it to the next stage of growth – whether it is a cash injection or a complete overhaul – then consider partnering with a private equity investor.
First of all, what is “private capital”? In short, these are finances provided by investors in exchange for a stake in the company. This type of financing is usually 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 capital and venture capital. Venture capital is actually a form of private capital, but the main difference is that it tends to finance younger companies as start-ups and start-ups.
Now that you know a little more, don’t stop there – there are many resources that will teach you everything you need to know about private equity financing. This is only the beginning.
After doing more research, let’s take you through what you need to do to obtain this type of financing for your company. The first thing you will need to do to start your journey is to interview potential investors.
We understand how difficult it is to find the right investor, so we’ve listed some key questions to ask when trying to find the right investor to partner with in the long run:
How much control will management and shareholders have?
Will there be further investment? If so, what are the conditions?
How experienced are private equity firms in your sector?
What are the main points of contact?
What happens if one of the parties wants to withdraw from the deal?
What costs will the business 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 lawyer present to negotiate on your behalf. You will want to find a law firm with experience not only in investing in private equity, but they must also have commercial experience in order to be placed in the position of management or founder. Choose your lawyers carefully and make independent recommendations.
Parabellum Investments are specialized mid-market investors who invest only money received from previous successful investments. Our independent investment fund does not include third party investors such as investment committees or banks. This provides faster operational processes and direct communication without having to consult with any third party investor, which is typical of a traditional private equity transaction. If you want to find out how we can help your company thrive, visit our website and contact us today.