Private Investors and Equity Finance

Posted on August 26, 2011 by admin



Private investors provide equity finance for business opportunity. They invest money into new and up-and-coming businesses; they have no preference in the industry sector that they invest in as they have a wide range of interests.

Private investors bring money to a business that is needed to move the business forward. As well as bringing in the required funding to get a business off the ground, a private investor will also provide your business with the skills and contacts that are needed to help your business progress.

2008 has, so far, not been extremely rewarding for private investors, which is why it is so important that you explore investments which are well positioned for a longer term favourable theme rather than those dependent on a highly unpredictable economic cycle.

With private investors some investors will invest passively, which means that after providing a company with the finance needed they will play a limited role within the company. In cases such as these the investors are usually professionals in medicine, law, real estate etc. Other investors however will want to be increasingly involved and will use their network and experience to drive your business. They will also want some type of control with business decisions.

When it comes to getting the help of an investor it is important to know that private investors have more confidence investing with people that they know so the fewer degrees of separation equals a greater chance of a deal being done. Before any deal is made it is important that you decide on the amount of capital needed as investors won’t be interested in guess work; they will want specific numbers.

The most common type of private investors are angel investors, otherwise known as business angels. These angel investors hold extremely high risk and require a very high return on investment. Due to the fact that a large percentage of angel investments are lost completely when early stage companies fail, private investors seek investments that have the potential to return at least 10 or more times their original investment within 5 years, through a defined exit strategy, such as plans for an initial public offering or an acquisition.

There are many different ways to describe private investors; they have many names attached to them such as venture capitalists and business angels. These private investors are often retired entrepreneurs or executives. They can provide your business with valuable management advice and important contacts. Private investors are wealthy individuals who invest in high growth business.

Private investors are growing to be one of the most popular ways of gaining business finance. This is making equity finance overtake debt funding as the best way of funding your business. Private investors are really worth looking into if you are hoping to start your own business. You do however have to ensure that you have your business plan wrote to the highest standard if you want to attract the help of private investor as they will use your business plan to see if your business has a high chance of being successful.

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Business Masters – Putting Theory to the Test

Posted on August 26, 2011 by admin



In terms of business education postgraduate students should head to London and the epicentre of the financial and business district for the best in business advice, theory and industry links. Business masters programmes cover numerous areas of business and finance. All MSc courses are designed with the needs of employers in mind and regularly put theory to the test in real life business situations.

London is also considered by many to be the world’s most exciting, diverse and creative city, and its business schools are just minutes from the City and easy reach of the countless cultural, entertainment and sporting opportunities that the capital invariably offers.

There is an international feel to many of the city’s financial and business institutions, with many undergraduate and postgraduate students venturing to England from all corners of the globe – understandable as business is now very much a global language. Part of any business masters degree naturally involves working as part of a team. Learning to interact and succeed alongside fellow students from various different walks of life is part and parcel of the business environment.

London business schools have an enviable strategic location, attracting employers who are keen to recruit students for their business and finance organisations. In addition to individual company presentations, institutions provide recruitment and careers fairs designed to get the ball rolling.

One of the major obstacles that undergraduates have of continuing their education with a business masters is attempting to fund their study for a further year. A Masters degree is a significant investment and students are urged to ensure that their personal finances for the year are in order before taking the next step and enrolling.

Business masters are crucial in distinguishing you from the competition in a number of competitive employment sectors.

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Raising Small Business Finance

Posted on August 26, 2011 by admin



Raising small business finance isn’t an easy process, particularly in light of the recent credit crunch and the liquidity problems experienced across global financial markets. Of course, that’s now filtering down to small business loans, which are much less easy to come by, particularly at start-up stage. Yet, ironically, getting any business off the ground requires money and a bit of faith from those with the resources to spare.

The Banks

Raising small business finance from a bank is still most likely the path of least resistance to raising funds. Your alternatives are to find a private investor or investors, who will almost certainly be looking for an equity stake in return for their input, and will be far more discerning that the bank in choosing to whom they give their financial backing. This second route is immensely difficult, unless you have a rich family member willing to step in and foot the bill on favourable terms.

Business Plan

If you do intend to raise your small business finance from your bank, you should initially prepare a business plan documenting the fundamentals of your idea, how your business will be run, and how much money you think it will make in the form of cash flow projections, profit and loss statements and other accounting documentation.

Assume Ignorance

Take care to explain every aspect of your business in your plan, and make sure to include conservative estimates on your figures. After all, chances are you’ll start as a small business, and the banks will realise this if you project over ambitious or unrealistic figures. Likewise in covering the details of your business, don’t presume knowledge – the bank manager / investor might not necessarily understand why there’s a need for your particular idea / piece of technology or why it’s any different to what’s currently on the market.

Utilise Your Personal Funds

It is advisable where possible that you make use of any savings or personal funds you may have available. This is not only good to give your business the funding it needs, but also as a sign to potential lenders and investors that you are fully committed to making your idea into a success, given the extent of your personal liability. What’s more, you might also find you already have much of your essential start-up capital available in overdrafts, savings accounts and credit cards. While a risky tactic, it can pay off big time if you’re looking to attract serious financial help for your business.

Private Investors

Finding a private investor is difficult for any small business, and if you’re committed about raising money this way, you’re going to have to do some serious leg work and be prepared to surrender a large slice of your potential business profits. It’s also important to make sure both you and your potential investor know on what terms the partnership between you may come to an end, so the investor can realise his investment and you can continue running your business. Thus it takes planning and hard work, not to mention a great, relevant pitch, if you’re looking to secure funding for your small business from a private investor.

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