We recently hosted a webinar looking at why business owners should consider private equity when selling their business. Lots of owners don’t think about private equity as an option when they’re looking to sell. Maybe there isn’t a full understanding of what private equity offers. Or in other cases there’s suspicion because of high profile deals that haven’t gone to plan.
But the reality is that private equity deals make up the majority of transactions in many sectors right now, including media and marketing services. And those deals are driving growth. So, what are the benefits of private equity and how can you work out if it’s right for your business?
We talked to Matt Harper, CEO of The Marketing Practice, and Adam Lewis, Founding Partner at Horizon Capital, to find out about their experiences from both sides of the table. Watch the webinar now or read on to discover our highlights from the conversation.
“Private equity gave us an opportunity to go on our own journey, to follow a path we were already on, but to be supercharged with the investment power that private equity can bring.”
Matt Harper, CEO of The Marketing Practice
“Clear alignment is pivotal to the entire model. It goes from our investors, to us, down to the managers and the vendors. We’re all invested in the success and failure of the business. It’s quite a pure, simple model.”
Adam Lewis, Founding Partner at Horizon Capital
Top 5 tips for finding the right buyer for your business:
1. Maximise your opportunity
Private equity backed deals make up over 50% of transactions in the current market. If you don’t consider private equity when selling your business, you’re ruling out over half your buyer pool.
2. It’s about people as well as money
Private equity is ultimately about helping SMEs to grow. And for that to happen there needs to be an alignment of vision, intent and culture. As with any relationship, it’s about the individuals, what they want and what they can contribute. There is a misconception that private equity are only focused on buy-outs. However, they do also make up a small segment of the growth capital market and should be considered as an option by SMEs looking for growth capital funding.
3. Private equity can be quicker
Completing a deal with private equity can be quicker than selling to trade. No two transactions are the same, but typically private equity deals take anywhere from a few months to a year.
4. Be aware of tax rule changes
With changes to capital gains tax likely to be announced in 2022, you need to prepare now if you’re thinking of selling your business. It’s important you’re aware of the possible pitfalls and understand how to avoid them.
5. Do your research and be prepared
If you’re considering private equity, find out all you can about your potential partner. How have they responded to businesses going through difficult times? Speak to other businesses they’ve invested in to find out. Having confidence in the quality and principles of the people you’re working with is vital.
Talk to us
If you’re thinking of selling or seeking finance, talk to our team of corporate finance advisers today.