How to Choose the Best Private Equity Firm
If you want to take your business to the next level ,one of the best ways to do so is to partner up with a private equity firm. Partnering with these firms have will help your company to be way more successful than it was before. There are many private equity firms out there and you need to pick only the best one that can help you achieve all your goals. Here are some aspects to look for when choosing the right private equity firm for your business :
Industry strength. Find out which firms invest in your business and why it is a unique investment. Most private equity firms are industry specific so find out which one invests in industries similar to yours. You can do this by checking out their precious investments and comparing them to what your industry does. Avoid choosing a private equity firm that invests in industries that are completely different from yours. The buyer that has industry experience will help you grow your company ,create more employement opportunities and increase your profits greatly.
Business circle. On which part of the business circle, is your business? Different private equity firms invest in different stages. There are some that invest in the early stages of a business,some in the growing stage and others solely on the mature stage. It is important to choose the one that invests in your stage due to their experience and expertise in that particular stage and will be of great help to your business.
Company size. Depending on the size of the company, an investment may be considered a platform investment for a private equity firm. A platform investment is for a larger company where the private equity firm invests and grows by augmenting organic expansion or acquiring other companies to add to the platform. Growth by acquisitions ,enhance platform investments and hence boost return to the investors. If you are ready to retire and your business is on the smaller size, selling it to a strategic buyer is very likely but if you are not ready to retire ,find a private equity firm that invests in businesses your size and encourage the autonomy of the business as a separate platform.
Questions to ask before choosing a private equity firm. The best way to know about a private equity firm is to ask the past companies that the firm has invested in.Ask to meet the owner of the portfolio company and ask him or her questions such as Were they willing to invest in additional growth capital? How did they work with the company’s management? Did they understand how to manage diversity?Did they behave like they promised and meet their commitment?The answer to these questions will help you decide if you want to work with that particular private equity firm or not.
Last but not least, know what type of investment you are seeking. Not all private equity firms have the same investment structure. You need to choose the type of investment structure that you desire to work with.
Once you have settled on the firm that you think is best for you in Los Angeles, California, you can now consult them on private equity.