Funding by a Private Equity Firm
“You got to have a wonderful and meticulously made business plan and you got to develop trust and rapport with the private equity firm in question.”
Your business may need substantial funding from time to time for expanding or other such activities of utmost necessity. These days the traditional sources of funding have become scarce and all the more difficult to deal with. So, what do you take resort to at such a juncture? A simple answer is to avail the services of a ‘private equity firm’.It’s basically a company that walks along with you and guides you in your quest for capital from the private sources. It’s ideal for small and medium sized business ventures and even provides the much wanted start-up funds for such ventures.
You got to have a wonderful and meticulously made business plan and you got to develop trust and rapport with the private equity firm in question in order to fulfill your dream of substantial funding.
You must also provide some kind of guarantee by the way of your assets or in some other way and also should be ready to give them a place in your board of directors. This is necessary because a private equity firm also wants to develop a sense of security and trust before providing you with the capital.
It may seem ironical but if you have an ‘exit plan’ ready in hand, it’s taken as a symbol of meticulousness and security by such a company. Actually, they are also wary of extreme risk as you are.
Such companies also look for high returns on their investments. So, if you are able to show them and convince them that your business is and will be a high-return business, they would not shy away from their promise.
You got to make a practical and pragmatic approximation of you goals as far as the profit part is concerned. Your projections shouldn’t be totally dependent on market forces but should have something concrete to impress your investor.
The fact of the matter is that private equity firms have a stronghold over a number of sources that may become instrumental for your cherished capital.
Such companies themselves may not have the required capital at all the times but they are past masters in arranging for and putting together of such funding requirements.
Author - DeeKay
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