If you're currently in the process of putting up a new company and you're needing help in getting financing, be assured that there are many avenues out there that could help you out. Take the time to look up information from the Small Business Administration and from private business websites such as Entrepreneur.com, where you'd get a lot of business ideas and pointers for developing, financing and managing your company.
Yet another one of the avenues available to you are private investment funds. Private investment funds refer to financial investment companies that have few investors (less than a hundred) who bring in substantial investments to private companies. These investors typically have greater than average personal wealth and who can afford to hire private advisors to give them guidance on their investment options and strategies. The average investor in a private investment fund typically invests about $10,000 to $500,000, and makes about 1 investment every two years.
Private investment funds are categorized under hedge funds, and they are also known as private equity funds. Because there are typically less investors in private investment funds, the private investment fund is less regulated than other investment ventures.
Private investment funds can be categorized historically as a risky venture; however, it can also give rise to the biggest yields. If you want to know more about the basics of private equity funds and how to find sources for them, here are some guidelines to help you out:
- 1. Know how private equity firms could help you out, and how they work. Private investment firms usually target startup businesses, and they usually keep their investments at an average of three to seven years (or sometimes longer than this). These firms have their own preferences, and it's best to approach those firms that match your company's goals and objectives. Also know that some private equity firms need to get their own funding, and they could receive this funding from institutional investors (which could be independent institutions or which could be their own parent company). The preferences of the private equity firms could be affected in a major way by whoever is funding their operations.
- Know of some of the most common partnership agreements. Many private equity firms invest their private funds on companies for a set time (say, ten years), after which the original investment must be returned, along with all earnings. This is called a limited partnership, which targets to help out businesses during the startup process.
- Look up relevant websites. There are available websites that would help you search for financial partners for your startup business, and these would include sources for private investment funds. One of these websites includes BusinessFinance.com. You'd need to fill out the online questionnaire, which would ask you questions such as your current revenue, your current business status, and your required financing. This tool will generate a listing of private investment sources that fit your needs.
- Find out other possible sources of business capital. Check out VC Experts for helpful articles on how you could search for funding for your business, whether your business involves private technology, retail, services or other products. Another website you could check out is EnterpriseOne, which will help you in learning guidelines about investment acquisition from private equity funds.
There you have it! These are just some pointers to help you find source for private investment funds. So if you're in the startup phase of your business, be assured that there certainly is help available for you! Good luck!