The State of the Private Equity Market
The private equity market is showing great promise for 2015 and beyond. The choices for new ideas and business concepts are seemingly endless, the entrepreneurs are eager to get their start-ups running and the loan rates are relatively low. Investors have the potential to make huge profits from smart new tech companies that aim to make life easier for consumers. By focusing on a select group of start-ups, venture capitalists can expect to spend more money on fewer investments, but they can also expect a bigger return for their money.
Where Does Private Equity Come From?
Private equity comes from venture capital firms and angel investors who give money to young companies that show great promise, but are not open for public trading yet. These venture capitalist work with the companies to set goals and strategies from product development to management with various degrees of control. Sometimes the investor is silent and is simply making a business decision in an effort to make a solid payout when the new company reaches a certain level of success. Other investors want more involvement in the process, with the possibility of a complete buyout.
How the Economy Plays into the Private Equity Market
The economy is a driving force in the growth of the private equity market. Right now, there are many opportunities for investors to obtain the money needed to help start-ups build their business from the ground up. The U.S. economy has bounced back from the recession. Things are looking up, jobs are more readily available, we are paying less at the pump, rates are low and it’s a prime time to invest in up and coming businesses. This is also true for overseas investors who are willing to spend more money investing in American start-ups. When the economy was down, investors were less likely to part with their money and inventors were hesitant to enter the business world.
Affordable Loans for Investment Loans
Obtaining the money for a start-up doesn’t always involve the use of a bank. Being able to keep up with current trends can also save investors money down the line. Using a hedge fund, for example, is one way to avoid the traditional terms of a bank loan. Corporation can pool their money to create an investment fund. Either way, it is better to get a deal that isn’t as highly regulated as a bank. Another option for investors is to take advantage of the low rates and refinance their current loans to save money in the long run.
Help for Start-Ups that Need to Locate Private Equity
Finding the right start-up to invest in can be tricky. The same is true for start-ups seeking investors. Sometimes it takes a third party to get involved and match the two. Efraim Landa is the owner of Effi Enterprises, which is an industry leading VC firm. He uses his 30 years of experience as a venture capitalist to match well-established companies that an interest in investing with young entrepreneurs who have a unique business concept, but need helping with funding. They need a sizable amount of money to get their start-up up and running.
This service can mean all the difference in the world for these young companies. It can help them develop a concept into a multi-billion dollar company. It can help pay for staff, space to work, manufacturing a product, branding and marketing for the business, as well as help rapidly grow the business.
A Great Time to Invest
There has never been a better time for venture capitalists. The market is flooded with new ideas and exciting business concepts. The economy is getting stronger. Loan rates are low. Private equity loans may be higher in overall price than in the previous years, as start-ups are being purchased at an all-time high, but the payoff is worth it. With the right concept, name and use of simple technology, such companies can create a net worth in the billions in a relatively short amount of time. It is these types of investments that actually help the economy grow by allowing more businesses to flourish and putting more money back in the hands of the taxpayers.
Posted on May 27, 2015, in investing, private equity, Private Equity Financing, the economy, VC financing, Venture Capital and tagged economics, investing, private equity, VC firms, VC funding. Bookmark the permalink. Leave a comment.