• Demystifying the complex world of Private Equity

Demystifying the complex world of Private Equity

09 August 2021

Author: Paul Morris – Head of Growth Advisory

In my e-book Demystifying Private Equity – An Insider’s view, I give you an insight into how PE works and aims to help you establish whether it is the right option for your business, how you go about getting the right deal, how to best work with your investors and finally, how you prepare the business for a sale.

The guide is a collection of articles, advice and videos from real businesses who have been through the journey. Below you will find taste of what you can expect to find in the book.

Are you ready for PE investment?

When a PE deal process fails it is very frustrating for both management and the prospective investor. In most cases, both parties have expended significant amounts of time and effort. There are many and varied reasons why a deal can fall through, but one that is consistently cited by investors is that a business was not “ready” for investment.

So what does being “investor ready” actually mean? How can you make your business investor ready? You need to ask yourself a series of simple questions and your honest answers will tell you how investor ready you are.

  • Is your management team strong?
  • Are you clear on your strategic priorities?

We help you understand the answers to these questions and more in our e-book.

Five top tips to help you judge potential PE investors

If you have started looking for PE investment, you’ll need some good advice that will help you choose the right investor.

When your business has strong growth prospects, you are likely to have a number of offers on the table from competing PE firms. These offers will probably be broadly similar in financial terms. The key question for you is how to make your final choice. Always remember that it is your choice.

There are aspects of the PE house strategy and performance that you should scrutinise as carefully as the PE house will scrutinise your business. Doing your homework will help you find the right investor. Remember, you will potentially work with your new PE partner for as many as five years.

Our e-book contains some suggestions that I hope will help you make the right choice.

Five common mistakes to avoid when pitching to PE

The prospect of raising PE investment can be both an exciting and daunting experience, even for an experienced and successful management team. Success requires weeks and months of preparation – developing a credible growth story, putting together an engaging investor pitch book and readying the business for the intense scrutiny of due diligence.

But all your good work can be undone by avoidable mistakes when you pitch to PE firms.

In this section of our e-book, I explore five of the most common mistakes and advise on how to avoid them.

Should I stay or should I go?

It’s often said of entrepreneurs and owner-managers that they spend too much time in the business and not enough time on the business. It’s the nature of the role that you tend to focus flat out on the work at hand, head down, dealing with immediate needs and priorities. There simply isn’t much time or space to look beyond the next 12 months. This has never been truer with so many businesses and business owners struggling to deal with the impact of the COVID-19 pandemic.

But every so often, you have a moment where you look yourself hard in the mirror and think: ‘I’ve had enough’. Is it a passing thought or an indication of something more serious? It can be hard to tell the difference because running a business is a lonely role and you don’t always have external input. This can be even more acute when you operate in a fast and ever-changing market landscape.

What are the typical triggers that could make you think about stopping? What are the indicators, external or internal, that could help you understand if it’s really time to consider an exit?

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