Did you know, private equity investments didn’t gain prominence until the 1980s. Instead of the public market, many struggling companies raised funds from private sources. So, if you are planning to choose a private equity partner for your business, you need to be extra careful. A lot of due diligence will be needed to separate the best from the rest. Once you have a reputed partner on board, new doors will open for your company, helping it grow like never before.
- The first and most important thing is to understand what you need from an investment. Even before you determine what a private equity partner can offer your business, it is important to know the amount and type of funding your business will require. Start by understanding your current growth stage and how much funding will be needed to get to some important business markers.
- Narrow down few reputed firms and look into what they can offer you in terms of advice. It is important to remember that you are not just looking for money but also for alignment. For instance, firms like Hult Capital will not only offer you money but also offer you industry-specific guidance.
- It is important to evaluate the track record of each firm you have narrowed down. From size and stability to capital resources and track record, there are a number of factors to consider.
- Try and understand what it would be like to work with a certain firm and how it will help you grow. Look for a PE partner that will focus on the bigger picture and not just on the operational details. Select a firm that will provide capital, contacts as well as advice.
- Look for a reliable firm like Hult Private Capital that has a good reputation in the market. Only a stable firm can help you raise follow-up capital, if needed. The firm you choose should have the expertise in picking dynamic companies to back. In a nutshell, choose a firm that has similar objectives and a proven record of success.
- When you are evaluating a potential PE partner, it is recommended to have a word with past investors in companies where the firm has invested. By looking at the current and past investments, you can learn more about the PE firm.
Questions to Ask
There are quite a few questions that you can ask when choosing a private equity partner. For instance, what is the size of the fund on offer, what is your target return strategy, profile and so on.
A private equity firm provides profit to investors within a certain timeframe. This time frame ranges between 4 and 7 years. You may be drawn to the overall branding of a PE firm but things will fall into place only when you start working closely with one or two partners of the PE firm once the deal closes.
Make sure you are taking all the above-mentioned factors into consideration when making a choice.
HULT Private Capital 