Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Private Equity Financing
Privateequity financing ismoney thatis invested in a privately held businessin exchangeforpartial...
The last questionmayseemobviousatfirstglance,butit’sonthe listfora reason.Private equity
investorscansettheirownunique req...
Upcoming SlideShare
Loading in …5

Private Equity Financing


Published on

Private equity financing is money that is invested in a privately held business in exchange for partial ownership of the business. The invested funds might come from private individuals or institutional investors. Regardless of where it comes from, there are many individuals and businesses that are ready and willing to invest in a make-sense business.

Published in: Business
  • Be the first to comment

  • Be the first to like this

Private Equity Financing

  1. 1. Private Equity Financing Privateequity financing ismoney thatis invested in a privately held businessin exchangeforpartial ownership of thebusiness. The investedfundsmightcome fromprivate individualsorinstitutionalinvestors.Regardlessof where it comesfrom,there are many individualsandbusinessesthatare readyand willingtoinvestinamake- sense business. The goal of the investmentistoearnmore of a rate-of-returnthancouldbe earnedotherwise. It can be like venture capitalorangel investorswhere the investorscanchoose toinveststartupfunding, but usuallythe businesshasbeenoperatingforawhile andneedsmoneyforexpansion. Private equityfinancingofteninvolveslarge amountsof capital eventhoughthere isnosetlimitof how lowor highthe investmentcanbe. Despite the fluidnature of thistype of financing,there are criteriaabusinesswill have tomeetinorde r to obtainthistype of businessfunding. The investorswill lookforassurancesthattheirmoneywill be usedwiselyandina waythat increases the likelihoodthatthe investmentwill bringhigherreturnsthanwouldbe expectedif givingbusiness loans. The investorwill balance the riskof investmentlossagainthe possibilityof investmentgainsandthen make a decisionasto whetherthe riskismanageable andmakessense. The investorwill looktosee if the entrepreneurassumesmore riskexposure thanthe equitypartnersor investors,whatstage isthe businesscurrentlyinastartupor well establishedbusinesslookingto expand,howmuchexperience doesthe managementhave inthe industry,andhow large isthe investmentrequestandhowdoesit compare tothe size of the business. The investorwill alsolooktosee if there isaqualitybusinessplanwithrealisticgoalsandprojections,to see if there isa marketingplancomplete,looktosee whatisthe company’shistoryincludingits historical financialandmarketperformance,andtosee if the businessiswillingtoacceptinvestor restrictionsplacedonthe investment.
  2. 2. The last questionmayseemobviousatfirstglance,butit’sonthe listfora reason.Private equity investorscansettheirownunique requirementsandrestrictionsforbusinessfunding,andyoumustbe willingtoagree tothem.The goodnewsthoughisthat you have more negotiatingleewaysince thisis private fundingandnotfinancial institutionlending. Thoughcompanieshave beenexperiencingdifficultiesgettingapprovedforbusinessloansinthe current economy,private equityfinancinghasalwaysbeenavailable.Unfortunatelymanybusinessowners simplydon’tknowhowtogo aboutfindingorraisingthistype of money. There are manysourcesof capital available todayrangingfromangel investorstoprivate equity financing.The one thatisright foryour businessdependsonmanyfactors,manyhave beendiscussedin thisemail. About the Author Searchcreditcards and reviewsinregardstothe best lowinterestrate,0%equilibriumtransfer,prize,cashrear,prepaid,universitystudent,airline,business and alsoinstantapproval bankcards. ApplyforBankcards Online.