To fuel the growth of your MSME / SME, at some stage you may consider the option of Private Equity Investment. Parting with equity is never easy and by all means, it should not be taken lightly. Whereas a business entrepreneur your goal is to give wings to your company for further growth, bringing in a private equity investor means you will be selling the ‘shares’ of your company to someone who in future may call the shots based on the equity you have parted with. We have seen how a lot many successful entrepreneurs have had to resign from their very own company based on the decision of the investors. It thus becomes imperative that a mentor is roped at the moment you decide to opt for Private Equity Investment.
| To define Private Equity – It is the shares representing ownership of an interest in an entity i.e. company which is not publicly listed. Based on the equity gained, the individual/firm who has invested stands to gain influence over the company’s operations, including HR, Finance, Administration, Expansion, etc. |
Listen to the Expert
As the owner; it is natural for you to overlook the nuances related to your overall brand image. Only the hawk’s eye of an expert can bring out the loopholes and help align the strategies and dynamics of your current business – both of which play an important role for your business presentation to the investor. It may take from a couple of months to maybe even a year for the expert to realign your business objective and goals to make it viable for Private Equity investment.
| The investors are inundated with funding requirements from a plethora of start-ups. It is only a well-articulated business plan that pulls their attention and this is what the expert shall help you put to the table. |
The expert may ask you to reshuffle your team, work on your marketing initiatives, chalk out a PR plan for you and have a relook on your financial management. All of these will be done with the objective of preparing your business for Private Equity Investment.
Bring in Clarity
With the expert, you need to narrow down on your long term goal. Keep in mind that the more equity you sell, the chances of you losing control of your organization stands high. Though this is not to be seen in a negative way as the private equity fund helps bring in new ideas with new managers coming on board. Though, the expert on board has to be briefed on your long term goal of either being on board of the company with enough rights or being open to selling the company if need be.
Thus it is imperative you have a clear vision in place and this can be worked out with the help of an expert. The expert comes with the experience of working with a host of start-ups and he is well equipped to counsel you and help you arrive at the clarity you need besides working on a plan approaching only the set of investors who gel with the objectives you have in mind for your business.
