what do private equity firms look for in an investment

What Do Private Equity Firms Look for in an Investment

When communicating with a large number of entrepreneurs who are attracting investments in their business, you are faced with the fact that the main question that they have is what do private equity firms look for in an investment?

The Best Way of Private Equity Firms to Invest?

The growth of socially responsible investing is largely driven by the values of the millennial generation. They are more than others concerned about global problems, including climate change, and seek to influence the reduction of the harmful impact of humans on nature. And although the ethical side of the business has long worried people, it was the millennial generation that influenced the emergence of “conscious” capitalism and the growth in popularity of ESG investments.

The private equity firms look for in investment to:

  1. Add interest.

After the authorization on the platform, using the functionality of the personal page, you formulate which projects you are interested in: from which industries, at what stage, with what amount of investment, and more.

  1. Receive offers.

Entrepreneurs, whose projects have been moderated and meet all your criteria, get the opportunity to present their projects to you for review. At the same time, you remain anonymous to them.

  1. Initiate contact.

If you are interested in any project, you yourself initiate contact with its author to obtain detailed information and further communication. In this case, the top management of the target company may not agree with the deal being prepared and take a number of measures aimed at countering the hostile takeover.

How to Create Value for Entrepreneurs Seeking Investment?

Many people dream of starting their own business. But what to do if you already have a cool idea and a team of like-minded people, and even the development strategy looks quite promising, but you can’t raise money to start? It is in this situation that it is worth remembering about the investor. As soon as a person has a round sum that he wants to turn into something big, the question arises of investing money in a small business. Choosing the right area for this is not an easy task.

The process of investing from the outside is a bit like lending. In both cases, money is invested for a certain period of time with one purpose. Experienced investors develop ambitious plans and calculate every step in order to increase their funds and not burn out. Private investors who invest money and experience in the development of startups in the early stages are called business angels. Most often, “angels” are professionals who understand how to build a business, who have accumulated enough capital, and want to receive income without spending a lot of time.

Tips for entrepreneurs seeking investment:

  • It is almost impossible to effectively promote your investment project and not pay anything for it, so put up with the costs. Advertising makes sales, and a loan to your company or a stake in your business is as much a commodity as a can of mayonnaise.
  • Don’t stay for a week or two. This is not enough. You will not realize the value of the site if you do not stay there (with a paid package) for at least 3 months, and preferably half a year.
  • Use all the features of investment platforms (paid and free). Get the most out of them.
  • Pay only for placement on specialized resources. They have the most concentrated audience.
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