Over the years, private equity has earned a bad reputation. Most people believe that private equity firms buy a business with the sole intention to break it into sections and sell off the divisions. While that may have been true at one point in time when the number of private equity firms was fewer, the strategies have now changed significantly with more and more agile private equity firms in London entering the market.
Today, private equity investors acquire lower middle market enterprises with the intent to add value. They invest in a business when they feel that they can contribute and accelerate the company’s growth potential. Additionally, small private equity firms in London now hold on to their investments for a longer period of time, sometimes even 7 years or more.
How Private Equity in London works?
A private equity fund is an investment in a company made by investors who seek to sell their stake after five years for a large amount of profit. The biggest difference between venture capital and private equity is the fact that venture capital focuses on early-stage companies with high growth potential whereas private equity firms make larger investments and acquisitions in a vast range of businesses.
At Pivot Digital Ventures we assist clients and brands like you with investor relations. We perform due diligence on early-stage technology companies and sectors, establish strong connections and relationships with investors and help with capital raises.
How does Private Equity in London benefit?
Private equity enhances the value of your business in the following ways:
- Cash flow: Private equity investors are typically high net worth individuals, which means that they can provide the financial resources you require to grow your business. These resources can be effectively used to renovate your premises, purchase the latest equipment or launch a new marketing plan.
- Expertise: Private equity firms have experts with the skills and talent needed to grow your business. These individuals support you to achieve new business goals and optimize your potential to the fullest. They constantly work along with you.
- Networking: If you’re associated with a reputable private equity firm in London, you will see that they organize annual events for CEOs and leaders. These events are opportunities for investors, founders, leaders, and peers to interact with each other, share best practices, and current trends for expanding businesses. The right PE firm helps you with one-on-one networking so that you establish valuable business connections.
- Management rewards: Private equity gives you the opportunity to provide incentives to management. PE investors don’t want the top-level management to leave. They want the skilled and experienced to remain strong in the company and, therefore, specific incentive programs for the same are devised.
- Value creation: Private equity groups have experts who can create value and propel the growth of a company. Several studies conducted by business and management institutions have concluded the same, recording a rise in profits and stock prices.
- Dedicated to success: Since PE investors have put their money in your company, they have an interest of their own and make sure that your business does well. This is true even in the case of small private equity firms in London.
Now that you have an understanding of the benefits of private equity, you need to approach the right companies and investors through our process at Pivot Digital Ventures.