Private Equity Investors

Private equity investors are a great source of capital for companies, here's a profile of private equity investors.

Private equity investors are generally wealthy individuals who commit large sums of money to start-up businesses. Many private equity investors are successful entrepreneurs who offer small businesses helpful advice, experience, contacts and of course, money. Private equity investors search for companies with high-growth potential, hoping for high returns of their investments. A private investor is usually easier to attract than a venture capital fund. This is not to say that private investors will throw away their money, but with a good business proposal and some luck many small businesses have secured large investments this way. For small businesses raising capital, private equity investors can be a great alternative to larger venture capital and private equity funds

Link to This Resource: Private Equity Investors

http://privateequityblogger.com/2008/07/private-equity-investors.html

Private Equity Group

The Private Equity Investment Group has over 5,000 members and connects private equity, venture capital, and angel investor contacts to create strategic partnerships, refer deals, trade models and co-adapt new strategies. In the future, the Private Equity Investment Group plans to hold webinars and networking events.

Link to This Resource: Private Equity Group

http://privateequityblogger.com/2008/06/private-equity-group.html

Leveraged Buyout

A leveraged buyout (LBO) is a hallmark of private equity firms, here is an explanation of what a leveraged buyout is.

A leveraged buyout occurs when a company acquires another company using a significant amount of borrowed money. The purpose of leveraged buyouts is that it allows companies to make major acquisitions without having to commit major capital. The company making the leveraged buyout will sometimes use assets from the acquired company as additional collateral on the loan. The rationale for a leveraged buyout is that financing a buyout through leverage creates potentially higher returns. Also, because income flowing to equity is taxed but interest payment toward debt are not taxed, the company making the buyout is able to pay a higher price.

There are some qualities that make a company more prone to a leveraged buyout:

• Hard assets (used as collateral)
  
• Minimal existing debt loans
• Good history of consistent cash flows
• Prime opportunities for increasing cash flows from operational changes
• Temporary market conditions reducing share price

Leveraged buyouts

Link to This Resource: Leveraged Buyout

http://privateequityblogger.com/2008/06/leveraged-buyout.html