PE platforms

Moving with the Times with Online Private Equity Platforms

by

November 13, 2013

Everyone ‘knows’ the internet is where the big opportunities lieThe ways in which we, as a global community, use the internet and various online platforms are evolving all the time. However, there are still many examples of where certain things, both in terms of individuals’ personal life as well as across business or industry, meet with resistance when it comes to doing it online.

 

There are still old-fashioned attitudes in place, an unwillingness to move on from something and embrace a new way of doing things, despite the fact that everyone ‘knows’ the internet is where the big opportunities lie, whether they are looking for a job, a new partner, or the best deal on a vacation or vehicle insurance.

 

Financial markets and private equity (PE) in particular, are one specific area where we see this happening. Make no mistake; online platforms for those looking for investments or need to secure a PE injection for their business, whether an established or a start-up enterprise, are growing and evolving with increasing pace.

 

Post a deal, enquire about deals in certain industries or geographic locations, buy a deal, make new contacts across the Private Equity marketplace; these platforms facilitate all of these initiatives.
It is understandable that long-term investors or businesspeople conditioned in the ways of doing things offline might be wary of switching to an online platform.

 

The reality of modern industry, however, is that without an online presence, you hamper your chances of achieving success. The internet is where the action is!
Opportunities still exist for finding PE deals offline and through traditional channels. It should be noted that these are usually smaller, “dead meat” deals, where returns will be limited, if they are forthcoming at all.

 

New businesses, in particular, should be viewed with caution if they are looking to fundraise offline. Did their efforts to secure PE funding online fail, or are they not informed enough to know that this is now the best way to get their opportunity in front of an experienced, willing to invest collection of high net worth individuals and investment groups? Either way, can you be confident in such a business from an investment perspective?

 

It is not the case that looking for funding or deals offline is dead; more that the big opportunities are online and that the important players driving the industry are recognising this and using such platforms almost on an exclusive basis.

 

Do you have the time to search painstakingly for funding or deal making opportunities offline when using the internet throws them into your lap? Online platforms like DealMarket and Angel List have also helped bring transparency and trust to the market alongside convenience and improved access.
Online Private Equity platforms are not just useful because they offer access to a wider range of opportunities in terms of securing finance or finding high quality potential deals. The impact they have concerning the now global nature of Private Equity is telling.

 

Previously, investors would tend to stick to the industry areas where they have knowledge or expertise (many still do) but more tellingly, they would restrict themselves in terms of the geographic location of the deals with which they would seek to be involved. Using an online Private Equity platform is an instant game-changer in this regard.

 

Indeed, industry research suggests that investors are looking further when it comes to diversifying their investment portfolio. Alongside a healthy number of local investments that they might have specific knowledge of, many are looking at PE opportunities elsewhere around the world, particularly in emerging markets where there are many long-term and potentially lucrative opportunities, including Africa and large parts of Asia.

Without getting online and seeking deals in this way, access to these deals would not have been forthcoming. The movement of so many big players means that the online Private Equity market continues to grow at pace.

 

Everything about finding Private Equity funding or deals online, from finding opportunities, to the faster due diligence process, to getting the deal done quickly, is attractive for all parties. It also means that small and medium sized investment groups or businesses can access the marketplace and compete with larger companies.

 

These parties are responsible for the majority of the market’s growth; they had little to no access to Private Equity before now, so this is driving the growth of Private Equity overall, as well as from an online perspective. Many deals are closed online daily, with some of the biggest featuring household names and services many of us use on a daily basis.

In recent times, high-profile deals to have been closed online include:
• PE firms including Silver Lake and Andreessen Horowit acquired 70% of Skype from eBay in 2009, before selling to Microsoft in 2011.
• Pinterest raised $100million in an early 2012 funding round, a sum that included significant investments from PE groups.

 

Deal seeking companies and individuals can benefit from access to online Private Equity platforms. At DealMarket, they can access a wide range of deals from the lower end of the market up to high value deals at the top of the Private Equity market.

 

DealMarket is a global one-stop shop delivering convenient, transparent access to a wide range of Private Equity deals across the world, as well as offering expert advice and opportunities to network across the Private Equity community.

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