The PE model of governance consists of the combination of strategic, financial and operational expertise. Non-financial support may include strategic advice, as well as facilitating access to established marketing or distribution channels.
PE investors actively manage their investment for a fixed period. After this they typically exit their investment, selling their shares, having seen the value of the invested company grow. In direct contrast with stock market listing, this means that the PE model is not a permanent source of funding. However, it may be more appealing to many, especially those who plan to make far-reaching changes within the business, because their operations will not be subject to the level of scrutiny that occurs with listing on the stock exchange.
A PE firm may exit the relationship in one of four ways:
Trade sale of their stake in the business; or
Sale to another investor; or
Stock market listing; or occasionally.
Employee ownership (sale to employees of the company).
To find out more, visit the part of the British Venture Capital and Private Equity Association (BVCA) website dedicated to private equity.
To explore the other finance options for your business, go back to the Finance Journey tool.
Access to the right kind of finance at every stage in your growth journey enables businesses like yours to invest, grow and create jobs. That’s why the British Business Bank and ICAEW’s Corporate Finance Faculty, and partner organisations representing finance and business, have created the business finance guide.
The Business Finance Guide
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