If you have a profitable company that has been in business for several years, and you are interested in taking it to the next stage of growth – whether it is injecting money or a complete overhaul – then consider partnering with a private equity investor.
First of all, what is “private capital”? In short, these are the finances provided by investors in exchange for an ownership 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 by the difference between private capital and venture capital. Venture capital is actually a form of private capital, but the main difference is that it seeks to finance 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 that will teach you everything you need to know about private equity financing. This is just the beginning.
Once you do more research, we will walk you through what you should do to gain this type of financing for your business. The first thing you need to do to start the journey is to interview potential investors.
We understand how complex it is to find the right investor, so here are some key questions you should ask when trying to find the right investor to work 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 companies in your sector?
Who are the main contact points?
What will happen if either side 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 asking these questions, we recommend that there is always a good lawyer negotiating on your behalf. You will need to look for a law firm with experience not only in private investment, but they must also have commercial experience in order to be brought into the position of management or founder. Choose your lawyers carefully and pay attention to independent references.
Parabellum Investments are specialized medium-sized investors who invest only money acquired from previous successful investments. Our independent investment fund does not include foreign investors such as investment committees or banks. This ensures faster operational processes and direct communication, without the need to consult with all third-party investors, which is typical of a traditional private equity agreement. If you want to find out how we can help your business thrive, visit our website and contact us today.