I asked Libby Gibson (pictured above) of Piper Private Equity to come up with 5 Things to Consider when going for private equity. Piper have worked with Boden, Bottlegreen, Las Iguanas, and many other brands. For more on their background and approach: www.piperprivateequity.com
Thank you, Libby.
Libby's 5 questions for you are:
1) Do you like the people? Firstly and most importantly, you need to ask yourself if you like the people. I describe it as like a marriage - they are going to be an integral part of your business for the next 3-5 years, so the right chemistry is vital.
2) Do they add value? Finding money, even in these harder times, isn’t that difficult. Finding partners that understand your sector, your industry and your business is a good start. But far better still if they have skills, knowledge and experience that means you can learn from their experience and get to the end goal faster, more efficiently and more profitably. Yes, your equity is precious, but you need to see the other side of the equation in terms of what a private equity partner can help you to do.
3) Do you know how much money you really need? Fundraising can be much more time-consuming and distracting than you imagine – think carefully about what you and your business need so that you don’t have to do it again.
4) Do you understand what’s involved? What can appear straightforward on the surface, is often much more complex that you think. Find an advisor who you trust, who can guide you through the process and who will safeguard your interests. Private equity investors much prefer to do a deal with entrepreneurs who are being advised too, as it tends to mean things get done more quickly and smoothly.
5) Are you and your investors aligned? Invest as much time as you can during the process to get to know your investors, to ensure that you have a common agenda and vision of where the business is going, how you are going to get there and what the exit route might be.Time in reconnaissance is always well spent.