We work with a number of Private Equity investors looking for the right opportunity in the right company and it can be somewhat like a match-making process.
For many businesses, there are lots of reasons why private equity funding can be tempting. In addition to the boost associated with being deemed of value, PE provides a solid capital base for future acquisitions, growth and transformation.
Investors are locked in over the medium to long term and offer a reliable source of expertise. Owners suddenly have somewhere to turn for advice and the much needed funding to accelerate their business potential.
However, getting the right PE investment fit with your company is critical. The investors will have a say in appointments, future direction of the business, financial issues and policies and so you will need to have confidence in them from the outset and importantly believe that they are the type of people that you can enjoy working closely with.
You could say it is the most important selection decision you may ever make. As the investors come on board, they will be increasingly involved at all levels and the chemistry and relationship is critical. Becoming part of a PE portfolio may also mean becoming a minority shareholder in your own business and therefore adjusting to the loss of autonomy can be highly challenging.
If the investors are the right fit and understand where the business has come from – and more importantly where it is going – then there is huge satisfaction in seeing real change for the better.
Growing the business with fresh input and expertise also brings new perspectives, new ideas and an added impetus where previous drive may have been waning.
So, the message is clear: make sure the selection of the PE firm is based on a fit for you, your business and your future. It is probably the most important appointment you will make.