Utah Venture Capital

What exactly is private equity you ask? Private equity funds invest in small to mid size companies who they believe can grow their revenues. They invest for the long term and are looking for both cash flow and dividends. They will buy up the equity from any other shareholders allowing the founders and early investors to recoup some of their original investments from the company.

A private equity firm requires some specific criteria before providing the equity to your business. Here are just a few of the criteria they require.

1. Security - they want collateral or assets against the capital, which gives them a sense of security towards their investment. They generally also want a seat on the board of directors, which gives them a sense of control.
2. High Rate Of Return - they look for a high rate of return on their investment. Sometimes it's in the form of a cash return, other times they are looking for thing perks like being the director plus cash. It lets the investor feel as if they have some control over how their capital investment earns money.
3. The Risk - the investor will want to know what the risk is and although investors are willing to take some risk, they are also looking for a realistic business plan that has realistic profit goals.
4. Exit Route - the investor will want a plan called an exit route to which he/she will retrieve their investment. This builds confidence that you have thought through how the repayment will occur.
5. Trust - all the business plans in the world won't make up for trust and trust will be built on a few things such as your credit rating being good, your business skills, and just how enthusiastic you are about your business.
6. Realistic - an investor will want realism attached to the optimism and he/she will want your goals and your projections for profit to be realistic. That includes paying yourself a realistic wage.

Unsuccessful commercialization is typically presented by an inventor with either no partner or the wrong partners. Commercializing an invention can be incredibly difficult and finding a trusted partner is, I believe, the first big hurdle. It is extraordinarily rare that a technologist can bring a commercial product to market without help from the right people. Outside advisors are no substitute for a partner. Venture Capital for inventors and early stage business.