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Funds Are Ready To Invest In Small Businesses.

Frequently private equity funds are sometimes a unique source of financing for representatives of average business. Attraction of the strategic investor not always reasonably, bank loans now very expensive and also not everyone give out them, the internal debt market is closed, and requirements for stockholder equity attraction on cross-border markets for the small companies are frequently excessive.

In many countries actively works an order of many private equity funds, such as: Advent International, Euroventures, P&S Group, etc. Many of them were created not so long ago on means of the international financial organizations, western sovereign, charitable and pension funds, the insurance companies and also private persons. In crisis perspective projects it is almost unreal to find, therefore private equity funds have renewed search of the companies just now when the economy has recovered from shock of 2009.

Life cycle of similar monetary pools, as a rule, constitutes five-ten years. In this time managing directors should find and perform investments, increase cost of acquired companies and to leave them with profit (expected return of investments ? not less than 25-30 % annually).

Now funds of private equity are ready to put in the companies on the average from $5 million to $10 million in exchange for 25?60 % of a share of the company. If the enterprise needs in the grater financing, managing funds can consider cooperation variants, for example, recently some companies has closed the transaction on share purchasing in company for the sum $40 million However, large investments are now more likely an exception, for risk minimization managing directors prefer to involve coinvestors.

In spite of the fact that investors declare the readiness to put in money, in practice to receive that money today is much more difficult, than in 2007-2008. Funds are ready to invest exclusively in the company ? market leaders who even in the conditions of crisis received the income and had stable demand for issued goods. While investors consider projects in agro sector, but already in 2011-2012, according to managing funds, transactions in financial sector, retail and pharmaceutics, and also in sphere of telecommunications are possible.

Does not frighten investors and the big debt load of business but only in the event that the involved means really will help to solve financial problems of the company and will increase its cost. And here those who is wishing to invest in startups after crisis are not much: as a rule, successful there is one project from several tens, and such risks are now inadmissible.

If the proprietor himself addresses to us behind financing, it needs to constitute the short resume of business: in what sphere it works, what is the situation in branch now. Acceptance of the positive decision is promoted also by availability at managers of the company of the business plan or development of strategy on the nearest three-five years: investors should understand for what borrowed funds will be spent.

It is very reasonable that government, despite this crisis is not leaving to help small businesses. And small business grants can be a true helper today.

But, of course, you should remember that today the fight for small business grants as well as for other types of grants has become harsher. This is natural – more businesses need them. So before you start your battle for the small business grants, please check out this blog for more
details about grant industry.

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