When a private equity firm invests in your company, they do expect to exit their investment within the next five to seven years. Since the firm has limited partners who expect liquidity at some point, they can't hold their investment forever. However, this doesn't mean that your company will have to sell your company or take it public. Alternatives might include recapping the company with bank debt, swapping out one investor with a new private equity investor, or raising capital from a strategic partner.
In any event, your private equity partner has a vested interest in growing your company over the next several years up to the exit event. Their goal during this period is the same as yours: to increase the value of your company by expanding the business.
Focus on what's important, put the myths to rest
Whether to take on private equity is a complex decision, requiring in-depth analysis of your personal and business goals, the market environment, and the financing options available. Focusing on these important considerations -- rather than on common misperceptions -- will help you make the right decision. It's time to put the myths to rest.
Jacoline Loewen is a partner at Loewen & Partners, Toronto, Ontario, Canada office, a private equity and venture capital firm. Jacoline can be reached at 416 961 0862 or jacoline at loewenpartners.com or http://www.loewenpartners.com