Why can private equity still be an attractive financing option?
PE fund investors have much more flexibility than standard and investment banking financers. This means they can complete deals that traditional investors could not. Also, depending on the industry, the size of the company and the nature of the fund, PE can provide appropriate leverage. PE funds can step up to complete deals in industries like health care, financial services and technology that require high levels of equity. When should companies pursue funding? Business owners should start looking into PE in their planning stages, preferably up to a year before they need it. Conducting a search for the right fund is not necessarily a difficult process, but opening the right doors can require persistence. By extending the timeline, business owners help to create a competitive market for the capital, reduce the stress created by imminent need and keep an even leverage in negotiating the terms of the deal. PE fund managers know about business owners’ needs and timing and will use this to
