Through trial and error, you have managed to grow your business, independently by seizing opportunities in the market or through a recent acquisition. As an entrepreneur or together with your management, you continue to see growth opportunities in the market. You are then faced with the question: how can I realize this growth potential in the future and is this step not too risky to do alone? You may then choose to enter into this adventure together with a private equity party.
As an entrepreneur, it is important to find the right match with a growth partner where both parties share the same vision for the company. To make the right choice in this, it is important to map out your own ambitions. What are your company's growth objectives and what are your wishes for the future? What is the growth potential and what are the market conditions that support this?
By gaining a better understanding of these factors, the first steps can be taken in selecting different growth partners. Discussions are then held with various parties, allowing you to paint a more concrete picture about not only financial and strategic opportunities, but also the investment horizon the growth partner can offer you.
Financial support
Realizing the growth of your company sounds promising if you are ambitious. However, growth also entails additional financial and operational risks. Choosing private equity reduces the risk for you as an entrepreneur.
On the one hand, you as an entrepreneur can cash in on part of the accumulated business assets. This can be done by selling a partial stake and realizing growth together with the growth partner. This spreads the risk over the various shareholders and you as an entrepreneur have taken some of your capital out of the risk sphere. In addition, it increases the possibilities of attracting (bank) growth capital, thus realizing further growth potential.
Operational and strategic involvement
In addition to injecting growth capital, a growth partner is able to take the company to a new stage of life. If the need is there, you can look for a growth partner with a lot of market knowledge and a broad network that can be deployed in different areas.
New value can be realized by entering new countries and markets. In addition to revenue growth, in many cases it is important to improve the company's structure and governance to facilitate further growth. As a result, efficiency improvements can be achieved. In addition, a strategic repositioning can take place to better prepare the business for the future.
Investment horizon
Working with a growth partner can accelerate the company's growth, creating and maintaining a competitive advantage over the long term. The growth partner may have a fixed investment horizon of four to seven years. After this growth period, in many cases they work toward a complete exit by selling the business to a strategic or financial buyer.
In addition, there are private equity parties without a fixed horizon or exit goal. While a partial sale of the company is often seen as a step backward for the entrepreneur, working with a growth partner actually offers a step forward to accelerate the company's growth.
