Private Equity Financing In the world of business, private equity financing is termed as way of raising capital by selling business shares to investors. The capital which is raised through private equity financing is not paid back in installments along with interest, unlike debt financing. In its place, investors become partial owner of that particular business by putting money in it. Then they are entitled to share profit of a business over time. Within three to five years, most investors wait for a return on their investment. Friends and family is the common source of private equity for business owners. Unlike personal loan, once business starts making profit, investments done by family and friends are paid back, although it might take several years. Often, it has been observed that with the operating cash flow of business, business owners fix payments to investors. One can say that when the business grow and makes profits, investors also make money. And once they get specific set of return on their investments, they usually get rid of that business in which they are involved. Usually, family and friends investments are made at the initial stage of business but as it grow and proves its worth, the business start getting financing from
angel investors . While venture capitalists and angel investors are lumped jointly as one funding source, actually they provide two different functions.
For More Information on Financial Services, Stay tuned with AlcorMNA! The Private Equity Advantage As it is said that private equity financing is not for all but it provides greeting option for debt financing to several business owners. In fact, private equity financing against debt financing cannot be charged with two major gripes business owners’ level due to risk with personally guaranteeing a loan and the constraint placed by it on available cash flow. Private equity eradicates the drawbacks of debt in that and for paying down debt, it does not divert capital from the business rather it shares risk in the business along with the entrepreneur. Another advantage of private equity is that you don’t need to pay right back to investors after they provide funding to your business. It means that one has more time for growing his business before he starts worrying about how he will how he will pay for it or not. And in case business fails totally, one doesn’t have to repay. It is fact that investors either swim or sink or alongside the business owners. Moreover, private equity is actually an umbrella term for huge money raised directly from recognized institutions & individuals and pooled in a fund that mostly invests in certain range of business ventures. For considerable long-term gains, attraction is the potential. Generally the fund is placed as a limited partnership, with the investors as limited partners and a private equity firm as the general partner. Typically, private equity firms charge huge amount of money fees for taking part in partnership and be inclined to focus in a particular investment type.
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With in-depth knowledge of the entire Private Equity investment process including– identification, initiation, structuring, valuation and execution– our team has the ability to execute transactions quickly and efficiently. AlcorMNA advise both listed and unlisted companies in raising growth capital. We perform in-depth due diligence on each fund that we consider, marshaling resources from across our investment team to identify, vet and select investments that can help clients achieve their portfolio goals. Alcor has strong relationships with key global Private Equity players & venture funds and understands investment themes and priorities of various financial sponsors. This helps us connect growth companies with PE firms in a focused and timely manner.Our deal structuring expertise and capability to execute private equity transactions through every stage of the deal process is a key strength.
About ALCOR Mergers and Acquisitions Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisory, Joint Venture Advisory, Financial Advisory, Private Equity, Debt Financing and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence. For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.
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