investment

Six Private Equity Investment Secrets

Angela Manning Finance , , , ,
Six Private Equity Investment Secrets

There are many people who like to call themselves private equity investors, not in the least because this is a world of big money. In reality, however, few can truly make it in this world, because the smallest mistake can cost millions and most people are quite unforgiving of losses of that magnitude. Gregory Lindae, a seasoned veteran in the world of private equity, has come up with six “secrets” that anyone in the business should be aware of if they want to be successful.

Secrets to Successful Private Equity Investments

  1. Be in the right place at the right time. Ideally, a private equity investor is able to find out about opportunities before anybody else. Usually, they do this by networking with entrepreneurs in online meetings, conventions, business events, and so on. Good investors, therefore, are always on the move, looking for the next big deal.
  2. Always research an opportunity. Good investors have a distrustful nature. Even if a company gets tons of positive feedback, no complaints at all, and offers airtight projections, there is always a “what if”. A good investor finds companies that focus on a sustainable and large market, who have an excellent exit strategy, and who have realistic financial projections in place.
  3. Always evaluate the management and leadership team. Good firms worthy of investment have strong management teams in place. This means there is a good business opportunity that attracts talent. Management teams should have years of experience and they should be able to demonstrate high investment returns.
  4. Always look at the exit strategy. Private equity projects are eventually refinanced or sold, at which point the liquidity event or exit strategy should kick in to offer investors’ their rewards. The exit strategy should be properly understood before embarking on a project.
  5. Always exert due diligence. A good private equity investor looks for funds that are in line with their own goals for investments as well. This means that they will peruse over the business plan of a prospective company, read all the information that is available, ask a thousand questions, and more. Only then should they even begin to consider whether or not to invest.
  6. Focus on diversification. Private equity is a form of investment and any financial expert will tell you that the only stable portfolio is a diverse portfolio. Through diversification, and particularly in private equity, money becomes more secure. While it means that gains may not be as massive as they would be if all money was invested in a single project, it also means that losses aren’t absolute.

Good private equity investors know all of this. Those looking for private equity investors, however, often don’t know this. According to Gregory Lindae, becoming more aware of how things work – or should work – will ensure that people gain greater security with their investments as well. Research, due diligence, and a healthy dose of common sense is all that is really needed in terms of choosing a private equity expert to work with.

The Biggest Investment Mistake and How to Avoid it

Angela Manning Business, Finance , , , , , ,
The Biggest Investment Mistake and How to Avoid it

Have you ever been skydiving? Most people haven’t but most people do know some of what it involves. Mainly, they know that, on your first few dives, you will be jumping in tandem, rather than being thrown out of a plane by yourself. The reason for this is that, whenever you start something new, you have to have an expert to hold your hand while you do it.

Gregory Lindae isn’t a skydiving expert, but he is an investment expert. And the biggest mistake he sees people make again and again, is that they believe the can read a little bit of information online, such as on Wikipedia, and believe they suddenly know it all. The reality is that you can read as much as you want, you will never have real life experience unless you have an actual go. But, just as with skydiving, there is no room for mistakes. They say that, if at first you don’t succeed, you should simply try again, but this, for obvious reasons, isn’t possible with skydiving! Similarly, it is not really an option with investing, because you will lose all your money if you don’t succeed.

The Other Key Mistake to Make

The reason why so many people who invest for the first time do things wrong, is because they are driven by their emotions. Did you know that studies have shown 96% would prefer to burn their mouth than to wait for food to cool down? And that 50% of people hang up the phone if they have been on hold for a minute? We want instant gratification, something that simply doesn’t exist in the world of investment.

Gregory Lindae also warns that we are no longer in the 1999 or 2000s, when stocks just grew and grew and people made millions overnight. At the start of 2000, there was a 15.6% drop in shares, and people panicked, selling everything that they had. Had they hold on to their stocks, they would have been sitting on quite a lot of money today. But that would have required patience, something that beginner investors in particularly do not have.

Similarly, those without experience often miss golden opportunities. Take solace in the fact that even Warren Buffett has been guilty of this. He once recommended people didn’t invest in big tech, including Amazon and Google, something that he now feels a lot of guilt about. He didn’t believe in tech systems himself, and that was a mistake.

Key to being successful, clearly, is to work together with an expert, someone who knows the ropes. But even that isn’t enough. It is best to have things checked and double checked, because even the experts have emotions. This is why people like Gregory Lindae always get second opinions on any decision they want to make, and they recommend their clients do the same. By building on the success of others, you have the greatest chance of becoming successful yourself.

Private equity: The regular myths debunked

Angela Manning Business, Finance , , , ,
Private equity: The regular myths debunked

It’s painted in all sorts of lights, but few disagree that private equity is one of the most lucrative industries around. Succeed here – and the riches can be beyond your imagination.

Of course, this sort of reputation also leads to countless misconceptions. Every month we see masses of information published on private equity and unfortunately, a lot of it is inaccurate.

While we don’t have a dissertation-like word count to mull through all of the misinformation we have stumbled upon over recent times, we are going to discuss some of the most common myths that this industry throws at us.

Myth #1 – It’s all about the exit strategy

As you’ll see with a lot of the myths that we analyze, a lot may have “once” been true. In other words, they have become outdated, which is why they are now myths.

This first one about exit strategies most definitely fits this description. Nowadays, private equity firms don’t have one eye on the exit, many are about the long-term approach. Sure, most still sell within a set period of time (usually five to seven years), but it’s not a case of getting out and making a quick buck like it once was.

Myth #2 – Private equity firms just want to appoint their own team

This is one of the primary reasons why private equity has a bad name amongst some sources. A lot of people believe that they like to just step in, strip a team out, and implement their own people. Once upon a time this may have been the case but suffice to say, times have changed.

In fact, you only have to analyze the philosophy of Marc Leder from Sun Capital to see this. He has publically said that one of his primary questions when scrutinizing a company is to see if there is an existing management team he can take advantage of. In other words, if this doesn’t exist it’s a major turn-off, for the simple reason that there’s nobody who can aid him with the existing workings of the company.

Myth #3 – It’s all about the big money acquisitions

This final myth couldn’t be any further away from the truth. The reason a lot of people think along these lines is because all of the news headlines center on the big acquisitions – the ones worth tens of millions of dollars (or more).

What people don’t realize is that there’s a whole other private equity industry. There’s one that hones in on small to medium sized companies, and this is just as vibrant. Sure, it might not have the huge profits attached that some deals have, but it’s a business in its own right and some investors perform very well with this approach.

It could be said that this links in to the previous myth as well. As PE firms were so renowned to appointing their own team and “forgetting” about the existing structure, a lot of smaller businesses opposed the practice. Now this has changed somewhat, this part of the industry has opened up.

Key Components For a House Extension

Angela Manning DIY , , , , ,
Key Components For a House Extension

If you have decided that the time is right to look for more space within your home then a home extension is the course of action which I would recommend. This was a dilemma that I was faced with some years ago and the idea of moving home for more space just seemed too much work, too problematic and, with a volatile housing market, potentially too expensive.

I decided therefore that I would extend my home so that we could gain the additional space that we were looking for and if you are considering doing the same thing, I wanted to use my experience to give you an idea of the things that you are going to need to work out.

Budget

Your budget is key to the speed and quality of the extension and whilst you should of course make it as large as possible, don’t forget that you will not money in reserve. These things always run over budget and there is always something that you will have to pay extra for. An example of this was the additional money I had to pay for the brickwork for the house, the original bricks had been discontinued and the guys down at David Montoya stonemakers were able to custom make them for me, an expense which I had not considered. Rsememrb that you’ll also need money for decorations and furnishings once the job is complete so do not go all in.

Planning Permission

Until you are sure that you have the planning permission for your project, the only person that you should have contracted is an architect. The architect will need to be there to plot the design and to tweak and change it so that it is granted permission from the local government. Without this you cannot build so make sure that you invest a lot of time and energy in gaining your permission.

Construction Firm

You should spend a lot of time when making the decision as to which construction firm you will use to carry out the project. Essentially what you are looking for here is a company with an excellent track record for speed an quality, a leader who will regularly inform of you of what is going on and who is always available and a construction firm which charge a fair price for their work. Use reviews from others, personal recommendations and meetings to decipher which is the best.

Stay or Go

Finally you need to consider whether you will stay at home whilst the work is being undertaken or go to a hotel or a family member’s home during this time. There are benefits and disadvantages to both options and it will vary from job to job. My recommendation would be to move out if it is possible, the job will get done quicker and you won’t have to live on a construction site for the duration of the job. The choice is your but decide as early as possible to cause as little upheaval as you can.

4 Ways to Find Funding For Your Start Up

Angela Manning Business, Finance , , , ,
4 Ways to Find Funding For Your Start Up

Did you know that 56% of new businesses will collapse within their first three years? And, that of the 44% which remain, over half of these will fail within the following 2 years? These are worrying statistics for anyone who is looking to commence their own start-up and as such it is vital that the reasons behind the failures of others are looked at carefully, and more importantly, avoided.

The majority of businesses which fail, do so because of either financial mismanagement or a lack of funding to keep the business going or seek growth when the time is right. In order to avoid these problems it is vital that you have sufficient funding in place for your new business, and here is where to get it.

Bank Loan

Banks have been loaning money to new businesses for a very long time and they are still one of the most tried and trusted methods of funding a new enterprise. Bank loans will have very reasonable terms regarding repayment structure and they will also assist you in your business in any way that they can. It is worth remembering that a bank wants your business to succeed, not only will it mean that they get their money back, but also that you are more likely to keep your business with them in the future.

Investor

Ever since the booming successes of start-ups such as Uber and Facebook, there are more and more investors looking to plough their money into exciting start-ups. These people are referred to as angel investors and you can use their money to propel yourself to success. Often you will need to pitch your idea to them and negotiate the terms of their investment, this could mean giving a small share of your business away for a helpful cash injection.

Grants

Governments love a successful start-up as they can have a positive effect on the economy as a whole, creating new jobs and adding to created revenue. For this reason there are a lot of grants which you could tap into that have been set up by government agencies to support you and your start up. The figures which you can get your hands on are not enough to complete your funding goals but they will boost your financial strength and give you a higher chance of success.

Personal Finance

There is nothing wrong with investing your own cash when it comes to setting up a business although if you do, you will need to consider your personal and business finances as two separate entities. The reason for this is because it can become highly confusing and could land you in hot water. If the business does run into difficulty, you should not have to pay for this out of your own pocket.

So there you have it, four great ways which mean that you can go and get the funding which you need, for that million dollar idea of yours.