Private Equity & Venture Capital
Link to Case Study

Inspired Business Vision can assist your business to secure Private Equity finance. The Partners have been involved in raising private equity finance for third parties and businesses in which they have been involved with as Directors and Shareholders. They will be able to offer advice and guidance and consult their network of contacts to see if your business would be suitable for PE investment. As part of the process of raising PE finance we would:

  • Identify the best venture capital investors and brokers for your fundraising
  • Negotiate terms knowing what is reasonable for the size and type of fundraising
  • Manage the fundraising process allowing you to focus on continuing to grow your business
  • Work with other advisors, such as lawyers, to ensure a speedy and smooth process and minimise costs

What is Private Equity?

Private equity (PE) funding is a general term for investments in private companies and provides significant investments – upwards of £2,000,000 – to high-potential businesses capable of rapid growth in exchange for an ownership of company shares (equity).

The money is invested by wealthy individuals or venture capital funds consisting of pooled resources from individuals and institutions. Unlike bank loans and other forms of financing, there is no interest paid on PE and the money does not need to be repaid (unless agreed upon in advance).

Many high-risk businesses with the potential to dominate a sector require substantial funding in order to do so. Marketing and recruitment are just two areas where substantial money must be spent in order to succeed. Traditional forms of financing, such as bank loans, can’t provide enough capital to make a difference. PE therefore provides high-risk firms with the level of cash they need. In addition, individual PE investors will often back up their investment with advice and business contacts.

Most start-ups and small businesses will be unsuitable for venture capital because they won’t fit the informal eligibility criteria of a high-risk investment that requires a large investment. Investors also want to see evidence of established business acumen which can be difficult for first-time entrepreneurs.

Gaining investment from PE funds is difficult. Investors typically only invest in entrepreneurs that have a proven track record creating high-value businesses. Most start-ups also require much lower levels of funding, which aren’t offered by PE. Investors are also focused in particular sectors that will provide a high return.

PE is an expensive form of finance, because of the significant sums and risk involved, investors want to ensure a sizeable return. Gaining PE can reduce a business owner’s majority stake to a minority stake, although they rarely want to hold a controlling interest however. At the very least be prepared to give away 30% of your company and expect the PE investor to insist on a non-executive director of their choice joining your board. Investors make their money when they ‘exit’ the business, either by selling their stake at a profit or when the company is bought out by a larger competitor. Maximising the initial equity stake helps investors maximise the return on exit.

Inspired Business Vision Partners have been involved in raising private equity finance for third parties and businesses in which they have been involved with as Directors and Shareholders. They will be able to offer advice and guidance and speak to their network of contacts to see if your business would be suitable for PE investment.

Contact Us now to see how we can help your business with private equity advice.


Link to Case Study

 


Copyright 2020 Inspired Business Vision Ltd         Terms & Conditions        Web Design by IO Studios