Private Equity, Venture Capital and Private Equity Funds form part of curiosity. But very short road maps are available to reach these destinations. Big ideas require Big Execution and Big Execution requires Big Money. We understand your business.
In the Indian economy, there are two major ways of raising capital for the business. One is through debt and another is through private equity. Both the markets – Private Equity and Debt markets have different modes of operations, expectation and criteria to work upon. The debt market works on the past record and performance of the company. However, the Private Equity and Venture Capital market work on future numbers.
When the promoters start the company, they require funds. The requirement of the funds may be for putting dream ideas into reality by execution or maybe for research and development of the desired outcome. Most of the financial institutions do not fund start-ups, as there is a lack of track record. Considering all such scenarios of startups, raising the funds through Private Equity and Venture capital is the most preferred and only option left.
Time has the utmost value. If any idea is funded on the right time and taken to the large scale it will be huge. Private equity works best in such scenarios. Here are a few of the reasons why one can opt for private equity investment.
Every idea and every promoter has the exponential capacity to excel. But it is all about the right time, right decision and execution. If the idea has the capacity to go global and if it is supported by the right infrastructure, the business can expand in a very short time. This is exactly what happens with private equity. Private Equity firms understand the stage of the scalability of the business and the right infrastructure required for the business. We can arrange the required funding at the very right time to excel and go global.
Expansion is essential. Whenever the promoters start a business, they have the vision to expand their business at the global level. When a Private Equity firm enters into the business they just don’t enter with money. They enter with all the required resources to make the bigger picture.
Along with the equity stake, most of the private equity firms and venture capital take part in the management of the company. This helps the overall ecosystem of the company to get better management and create a road map for success.
Private equity and venture capital operate globally. They are not bound to work in any specific geographical locations. This helps to have cross border expertise. Let’s say your company may have the potential to grow 5 times in India but have the capacity to grow by 10 times in some part of the world, which you may not know. Global expertise will help you to explore the international market in the best possible ways.
When it comes to equity investment, of course, there is a dilution of the equity. However, the interesting part for the promoters is that it is not just dilution of the ownership, it is the dilution of risk associated with the business. The private equity players become your partners in all stages of the business as long as they stay invested in your business.
There is no limit on the maximum amount of funding. If you have a good idea and have the vision to expand the business, then there is no limit on the maximum exposure private equity firms can take on your business.
Private Equity investment does not get infused into the business unless the terms and conditions of the agreement are mutually agreed. So there is no risk for the promoters to have a hostile takeover on any part of the company management.
Here are some of the frequently asked questions from most of the private equity promoters-
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