Private Equity Myth #2: Valuations are the only consideration

Valuation is certainly an important consideration since you want to get a fair price when you sell your company. However, it's equally important to partner with an investor who shares your goals and who will work with you to achieve them.
When you focus exclusively on valuation, you risk ending up with a partner who doesn't understand your company, your growth strategies, or your industry.
Let's say, for example, that you sell your company to an investor whose expectations for your business are unrealistically high. You may obtain a good price for your company, but that relationship is likely to sour as the business fails to meet the investor's expectations. On the other hand, an investor with a more nuanced understanding of your company would work with you to increase its value in a realistic and sustainable way.

Jacoline Loewen, author of Money Magnet, shares her insights on attracting investors. Ms. Loewen works in Toronto, Ontario.
Jacoline B. Loewen is a managing director at Loewen & Partners, a private equity and venture capital firm based in Toronto, Ontario. Loewen & Partners works with the owners of growing, privately held companies to access capital. Jacoline can be reached at 416 961 0862 or Jacoline at loewenpartners.com.