Here are two videos representing different financing perspectives for medium-sized businesses. Are you seeking funding to grow your business or for other needs? You may be interested in pursuing investment from a private equity firm to acquire funds to grow and strengthen your business. Or you may be interested in selling off a small stake (minority ownership share) in your business to generate cash and extract funds to personally monetize some of your company’s value. In both scenarios it is important to identify and build a relationship with one or more private equity firms before going full throttle in your quest to obtain business funding.
Bringing in a private equity firm in the above scenarios equates to entering into a long-term partnership with an active investment partner. Not all firms will be a good fit for you so you need to understand what PE firms need and match your needs or your business’ needs with theirs.
Watch the video below to hear insights directly from a private equity firm: Advice for Seeking Private Equity Funding.
Private equity firms are interested in how well a company interacts with its customers and differentiates itself and its products and services from the competition. Companies that have distinctive offerings or branding command a higher value than those that do not. Companies that sell goods and services at commoditized prices, command the lowest value.
Private equity firms want to see a good business plan. This does not translate into a long business plan but does mean that the PE firm wants to get a picture of your company’s intended strategy, or journey, to reach its goals. What are your firm’s strengths and weaknesses? How will you exploit the former and address the latter?
In this next video, individuals from a number of PE firms discuss what helps you, as a business owner, garner the highest valuation for an investment into your firm or obtain the highest selling price, if you want to sell out completely.
Watch this video: How to Sell Your Business or Get Funding – 3 Dealmaking Strategies:
Keep in mind that private equity firms typically exit their investments in five to seven years. When seeking funding from PE firms, your business plan provides these firms with the roadmap you’ll follow to get them to their exit.