15 PRIVATE EQUITY | BDO LLP
CHOOSING A PE INVESTOR: 5 TOP TIPS FOR YOUR TECH BUSINESS HITTING THE SWEET SPOT? PE funds will have a range for how much they will invest in each deal. You need to use your network, and ask advisers to understand each potential investor’s funding ‘sweet spot’. If the deal is at the lower end of their range, will the investor give your business enough focus going forward? If the deal is at the higher end of the range, there may not be sufficient appetite for follow-on investment. Look for a deal that is important enough to matter to the fund, while allowing room for future funding. 1.
Started looking for PE investment? Here are five key tips for judging whether an investor is right for you and your tech business. When your technology business has strong growth prospects, you are likely to have several offers on the table from competing PE firms. These offers will probably be broadly similar in financial terms, so the question for you is how to make your decision. Here are some suggestions that should help you make the right choice. And remember, it’s your choice. There are aspects of the PE house strategy and performance that you should scrutinise carefully, as they will certainly be scrutinising you!
Do your homework and remember, you will potentially work with your new PE partner for up to five years.
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STRONG TRACK RECORD? Does your fund or investor have a good track record of successful investments in the technology subsector you
operate in? Your potential investors will not hesitate to judge your company’s historic financial performance, so you should apply the same lens to your choice of investment partner. For example, you could ask for details of the returns made from the last fund.
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