Partnering with a private equity investor that fully understands the value of decisions beyond their investment period is a game-changer. Many times, this is what makes the difference between a true partnership and having big brother undermine your every decision before a major management team shakeup.
When it comes times to pick between the top few suitors to recapitalize your business and take some hard earned money off the table, take the time to really get to know other portfolio company CEO’s and dig deep into what their partnership really looks like 3 layers down into the onion. Upon identifying plausible partners in your business’ growth, show investors that you understand and are capable of understanding other possible ventures.
Getting to a position where you have your pick of investors is no easy feat however. So how do you position yourself in the best light to attract positive attention and investment in a competitive market? Below are a few things you can implement to set you apart from the many other firms seeking private equity partnerships.
Understand the Value of Positioning
While marketing businesses, owners not only need to know investors are looking at but also how and why they are buying into specific companies.
- What common attributes do businesses they invest in have?
- What financial profiles seem most attractive to them?
- What is the growth trajectory and outcome of investments they have made, and how do you compare?
- While you seek to draw attention to how you are marketing your products, examine how you are positioning yourself before investors. Such a strategy means that you look beyond your influence, consumers and products, and considering why your brand may be the perfect fit for a particular investor.
Make Your Customer a Winner
Your customers are true brand ambassadors, and they play a pivotal role in providing the market validation proof you require as you seek monetary backing. As you bring in new customers, clearly articulate what they require and why your offering meets these needs.
Once you make a customer feel like a winner, you not only win them over but also keep them coming back for more. Further, these customers become your greatest supporters when investors start digging into your customer success strengths. During the funding process, keep a light on the positive feedback you have received from your loyal customers to illustrate product traction.
Give a Picture of Your Business’ Potential
Showcase the market potential of your business by envisioning and clearly explaining the full potential instead of focusing on your past wins. It is your responsibility to paint your business’ vision convincingly, and that demonstrates the long-term, sustainable impact.
Focusing on your current story and success is essential for an overall storyline, but concentrate on the future potential seeking funding. Transform your long-term, big-picture ideas into understandable and tangible growth plans.
A realistic outlook forces you to think objectively and unemotionally about your goals. Further, a plan makes it easy to communicate your strategies and objectives to possible investors while ensuring all strategy aspects are integrated and transparent.
As you consider getting private equity partners, understand the role they will play in all aspects of your business and make sure that they have a solid understanding of your industry. A willingness to compromise on a few items for a shared, broader business plan is a positive sign of a true partnership budding.