When considering the sale of their company, many owners will typically discount the prospect of private equity investment, with many holding reservations based on a long-standing viewpoint that this type of investment means they will have to work for someone else, which ultimately causes a lack of control.
In stark contrast to this divisive opinion, many private equity firms believe that this type of investment deal can deliver excellent results for any company owners looking to sell. Here we’re looking at five key benefits that private equity investment can offer your company.
Long term investment opportunities can be highly beneficial for your company!
When it comes to private equity investment, firms will often invest in mature companies for a long period of time; this can be anywhere from 5 to 20 years. Securing a long-term investment can be highly beneficial for your company in a number of ways.
One of the main benefits of a long investment horizon is that the investor will use this time to think strategically and seek to preserve capital by minimising any risks. The long game that most private equity firms employ helps ensure that the greatest value is extracted from the chosen company at the right time. This will be when the sector or market is performing at its strongest; at a time when investors will be drawn to this type of opportunity.
Did you know that private equity investment could offer you the best return on shares?
In most cases, private equity deals can offer huge amounts of funding to company owners looking to maximise returns on their shares, along with a much-needed cash injection to help accelerate growth. In the right circumstances this type of deal will provide a significant return to the company owner and should not be discounted.
The main reason for this significant return is impressive pool of money many private equity firms operate with, alongside their continual efforts to find and cultivate companies with serious growth potential. Most private equity investors will understand how to identify this type of growth potential and are usually happy to pay a higher value for businesses that have the potential to generate significant returns.
You will likely be able to continue to run the company without direct involvement from the investor
While most private equity investors will require you to sign over ownership of most, or all of the company’s shares, they don’t always want to take a direct, hands-on roll within the business. This means you will be able to remain within the company in a managerial capacity and can benefit from the additional financing and expert guidance given by your investors.
Most investors will take the time to help you develop a clear and sustainable growth plan. This is completed at the beginning of their investment period. Your investors will then sit back and leave the actual delivery of the strategy to you and your team.
Private equity investors excel at creating value!
It’s always important to remember that private equity investors are extremely skilled at what they do. The vast majority of investors will have a wealth of experience to draw upon. This ensures your business will be in capable hands post-investment.
If you’re looking for more information or help with the private equity investment process, you should consider consulting an expert firm like Goodwin. Their friendly and highly-skilled team of experts is on hand to ensure you secure the best private equity deal possible.
A private equity firm wants your business to succeed
As your private equity investor has finds tied up in your business, this means they have a vested interest in the future success of your company. Your investors need your business to succeed in order to see a return on their initial investment. This will incentivise your investors and ensure they are committed to making your business a success.