PIPEs as a Financing Tool for Medium Businesses

business growth

Businesses use PIPEs to fund growth and expansion.

In a previous article, I wrote about using PIPEs to access hedge fund monies. (To view that article, Seeking Funding? Use Hedge Funds (via IPOs) go to http://theresourcefulceo.com/2014/04/seeking-funding-use-hedge-funds-via-ipos/).

To ensure you understand the value of this potential funding source, here’s another brief excerpt from my book, “The Funding Is Out There!”: “When to use hedge funds and PIPEs: Your company has a rapid growth initiative, generates minimum revenues of $2 to $5 million (revenues exceeding $20 million are even better), needs millions to grow as planned, and has intentions of going public.”

Remember, PIPEs are private investment in public entities.

These barely regulated pools of leveraged equity now boast more than $1 trillion in assets. Once reserved for very high net worth individuals due to their minimum investments of $10 million, the number of funds and the amounts invested in hedge funds have grown tremendously. This growth is due to the increase in the ranks
of the very wealthy, the disenchantment with the stock market after the tech bubble burst, and the reduction in the minimum investment threshold to as low as $250,000 for some funds. With so much money (and relatedly, so much competition for deals), hedge funds must continually search out new investment vehicles. As a result, more and more hedge funds are investing in or interested in investing in early stage, (small, high growth potential companies).

This led to the genesis of PIPEs.

Because the use of PIPEs to fund your business can be a difficult concept to understand, here is a video that provides you with a brief overview of hedge funds and PIPEs.

Want to know more about PIPEs and other financing alternatives for your business? Subscribe to this blog at http://theresourcefulceo.com/blog/blog-subscription/. The newsletters / blog subscriptions are delivered no more than 2x per week in a format that is compatible with all mobile devices.

The Funding Is Out There offer

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Copyright © 2014  by Tiffany C. Wright. Portions of the above is an excerpt from the book, The Funding Is Out There! Access the Cash You Need to Impact Your Business. This book will be published by Morgan James Publishing and available on Amazon in August 2014 and in bookstores and libraries in October 2014. All information is copyrighted. No part of this publication may be used without prior authorization from the author. For an advance copy in eBook or softcover format, please visit The Funding Is Out There!

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More articles on or related to PIPE financing:

Book Excerpt: Venture Capital and PIPE Financing

How to Sell Your Company (or Portion of Your Company) for a High Price