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, thus understand your business. At Terkar Capital, we arrange private equity instruments across India.
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, expectations, 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. So, the requirement of the funds may be for putting dream ideas into reality by execution. It may be for research and development of the desired outcome. Most financial institutions do not fund start-ups, as there is a lack of track records. Thus, considering all such scenarios of startups, raising the funds through Private Equity firms and Venture capital is the most preferred and only option left.
Time has the utmost value. If any idea is funded at the right time and taken to a large scale, it will turn huge. Private equity works best in such scenarios. Here are a few of the reasons why one can opt for private equity services.
1. Right Time Funding
Every idea and every promoter has the exponential capacity to excel. But it is all about the right time, the right decision, and execution. If the idea has the capacity to go global and if it is supported by the proper infrastructure, the business can expand in a very short time. This is exactly what happens with private equity. So, Private Equity firms understand the stage of the scalability of the business and the proper infrastructure required for the business. We can arrange the required funding at the very right time to excel and go global.
2. Economies of Large Scale
Expansion is essential. Whenever promoters start a business, they have the vision to expand their business at the global level. So, 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.
3. Experts On Board
Along with the equity stake, most of the private equity firms and venture capital take part in the management of the company. So, this helps the overall ecosystem of the company to get better control and create a road map for success.
4. Global Expertise
Private equity firms in India and venture capital operate globally. They are not bound to work in any specific geographical location. 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 parts of the world, which you may not know. Thus, global expertise will help you to explore the international market in the best possible ways.
5. Dilution of Equity & Risk
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 diluting the ownership, it is the dilution of risk associated with the business. So, the private equity players become your partners in all stages of the business as long as they stay invested in your business.
6. No limit on Funding
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.
7. Mutually Agreed Terms
Private Equity investment does not get infused into the business unless the terms and conditions of the agreement are mutually agreed upon. So there is no risk for the promoters to have a hostile takeover of any part of the company management.
Here are some of the frequently asked questions from most of the private equity promoters-
Investors and promoters mutually decide the dilution of equity or ownership. There is a certain criterion that is to follow while valuing the business. The dilution of equity and investment is based on proportion. Higher the dilution of the equity, the higher the investment from the private equity firms.
Not really. Private equity firms are interested in multiplying their investment. The firms bet upon the idea and the promoters. They are interested in keeping the ground open and clear for the promoters, so promoters can execute in their style and derive the visioned result.
Private equity investors don’t limit their investments to any geographical location. As long as they are permitted by the respective governments they can make the investment in any part of the world. So the investors may be from an Indian market or maybe from the International market.
Private Equity players follow the flat operational structure. There is not much time required to take approvals for the investment stake and amount. Generally, the assignment time may vary from 10 working days to 60 working days. This time includes right from preparing investment decks to the infusion of the funds.
Yes. The promoters and the company can take more than one private equity investment. This kind of investment may be at the same time or maybe after a subsequent interval.
We at Terkar Capital work with many national and international debt and private equity players. We understand the requirements of the client. And with respect to the requirement, we arrange financing options from the Indian and International markets. We are one of the best private equity firms in India. We work on end to end execution of the fundraising process.