|
|
 |
Sources for Private EquityThere are many different types of sources available for private equity. The most common sources are private equity firms who are willing to provide all of your financing at every stage of development. Another source is private individuals, who like to put all of their focus in businesses that are in the startup or early development stage. When you're targeting possible sources of finance for your business it will help if you have some understanding of how these equity sources operate, including their preferences and a little about their own business structure.Private equity firms commonly like to keep their investments for anywhere from three to seven years or longer. They typically have a wide range of preferences for their investments as well as the types of financing that are needed. You should only approach those private equity firms who have preferences that match your own needs and requirements. But just where do private equity firms find the money to invest in your business? Private equity firms, just like your own business, are constantly competing for their own financing and will increase their funds from a variety of other sources. In order for them to get their own financing they need to show that they have a good track record when it comes to choosing which businesses they have invested in. As well, private equity firms need to show that they have achieved a greater return than that which could be met through interest that is fixed or investment equities that have been quoted previously. Many private equity firms will raise funds to invest from sources outside their company that are known as institutional investors. These institutional investors can be insurance companies and pension funds that are entirely independent. When private equity firms get their funding from their own parent company they are working under an umbrella. Many equity firms will raise their funds using a combination of independent institutions along with the parent company. The source of the private equity firm's funding can have an affect on your own business. Many times the equity firm's preferences for investment can be affected where they have gotten their funds. External sources are often set up as limited partnerships. This means that they only have a fixed life of ten years. During this time the equity funds will be invested but at the end of the ten years the original money must be returned to the investor along with any additional money that has been earned as a return. This means that the investments need to be sold. And if the investment was in the form of a quoted share, the share needs to be sold before the fund is closed. It's worth your while to determine if limited partnership sources will be beneficial to the growth of your company. |
|
|||||||||||||||||
 List your company for Venture Capital and Angel Investors | |||||||||||||||||||
 © Copyright 2001-2008 Second Venture Corporation. All Rights Reserved. Home : Writing Business Plan : Website Development | |||||||||||||||||||
