What Does Your Business Need?
There will have undoubtedly been a long thought process put into seeking private equity finance for your business. While you will have had to prepare meticulously to present to a potential investor group, it is important to recognise that the whole process of seeking private equity finance is as much, if not more, about what is the best deal on the table for your business as well as for the investors themselves. If your business’ needs and the investors requirements meet in the middle, then a successful investment offer may well be forthcoming.
Understanding What A Bad Deal Looks Like
From your point of view, it will be critical to balance the time and work you will be putting into the business in relation to the returns you can expect to get at the end of the time period, both financially and otherwise. A bad deal for a business will see a great deal of input from your end while not getting much out of it ultimately. It is important that you understand the individual motivations of each investment group and what they can bring to the table in terms of knowledge and support. If an investment group works on taking large returns from an investment, then this sort of private equity finance may not be right for you. Should your business plan and balance sheet tell you that once the private equity finance has been removed from your business you will be back to square one, then this is undoubtedly a bad deal for you. While an aggressive strategy from a private investment group may seem attractive, it could ultimately prove futile for your business in the long run.
Good Deals Are Definitely Out There
The vast majority of private equity finance agreements are fair and well put together, with a clear emphasis on the long term success of the business as well as a favourable return for the investors once the private equity finance is withdrawn. Look for a private equity group with knowledge in your sector, who are willing to be flexible in terms of payments and timescales and who can support your business in whichever way you need.
Finding a great private equity finance deal for your organisation could ultimately lead to long term financial success. The best private equity groups will have a demonstrable portfolio of investments who have remained strong since their funding was removed from the organisation.
There are different ways to recognise if private equity finance is a good deal or a bad one.