Funding Option: Private Equity
No Description
👍 Advantages
• Investment is more flexible and could be used to fund growth in the business and/or shareholder cash realization
• Private equity investment usually entails a degree of professionalization ensuring the business grows profitably
• PE investors will bring a focus to achieving a successful exit ensuring decisions are made in this context
• Having a well known PE investor on board improves the financial standing of the business, often giving credibility in areas such as raising bank lending or buying other companies.
👎 Disadvantages
• Many PE investors will require a majority stake in the business.
• PE investment will often involve the introduction of debt, whether from a bank or the PE house. The business will be required to fund these debt facilities
• Investors will focus on achieving an exit in 3-5 years
• PE investors will have legal mechanisms that could result in changes to the management team if targets are missed.
👀 Examples
Some of the most notable PE firms include KKR, Blackstone, EQT Partners, CVC Capital Partners, Thoma Bravo, The Carlyle Group, General Atlantic, Clearlake Capital, Hellman & Friedman, Insight Partners, Bain Capital, Goldman Sachs Capital Partners, Vista Equity Partners, Silver Lake, Warburg Pincus, Leonard Green & Partners, Clayton, Dubilier & Rice, Francisco Partners.🏢 Compatible Entity Structures
🤝 Compatible Business Models
