This week we discovered a useful article for entrepreneurs in PrivCo’s knowledge bank online. It is useful if you are considering taking on a private equity investor and want to see the bigger picture. The article is published by PrivCo, a business and financial information provider specialized in including family owned, private equity owned, venture backed, and international unlisted companies.
While the private company financing overview is targeted at US-based business owners, much of it has a wider value. It is the kind of info that can help business owners looking sell shares in their company to make better decisions and manage risk.
The tutorial includes detail on the types of funding available for entrepreneurs considering a private equity investment, as well as practical advice, such as, making sure you adhere to regulatory frameworks early on.
It says, for example, “Even to raise the most basic Angel Investor funding, it’s very important that private companies follow securities laws, make full written disclosure to investors of the terms of the offerings and how risky the investment is…” And there is the reminder to raise money primarily or solely from sophisticated investors, knows as “accredited investors”.
A concise history of Private Equity and Venture Capital, including the three boom and bust cycles of PE, as well as details on the advantages and disadvantages of raising angel capital. Information about term sheets, terminology, and evaluation criteria used in venture capital are also provided. It is a great backgrounder for anyone new are coming back to PE.