Raising Capital Best
Practices
Welcome to BABM Raising
Capital
Best Practices Magazine where you can read succinct articles
online. The articles will provide you with valuable
information that can be immediately implemented to help
take your business and personal success to the next
level.
OPM
Other Private
Money
By Phillip S. Dingle
Published: September / October 2008
The media is full of stories about private equity
groups, most frequently in the context of buyouts on a
national or international scale. A favorite local
example is the recent privatization of OSI, Inc. -- the
parent company of Outback Steakhouse -- by Bain Capital,
Catterton Partners and the company’s founders. What few
business owners may know is that private equity
financing can be a valuable tool for growing smaller
businesses as well.
For the entrepreneur or
small business owner, the lowest cost of capital is
usually a traditional commercial loan from a bank. While
the bank is keenly interested in the business and its
success, it typically will charge a lower rate of
interest and not require an equity stake for a business
to borrow. The following is an overview of the process.
Angels are high net worth
individuals or groups who invest in new ventures. They
are often the best source of capital for the
entrepreneur after he/she has tapped out “friends and
family”.
Every business needs help at
some time, and the need for financing usually trumps all
other situations. Although conventional wisdom has
business owners or their CFOs going out to “fight the
good fight” on their own, often a financial intermediary
is a key player in the process.
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