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The State of the Private Equity Market

Private Equity Markets

Private Equity Markets

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. Read the rest of this entry

Who Can Invest in VC?

Invest in VC

Invest in VC

To be a Venture capitalists broker you need money, you need to be considered an accredited investor, and you must know the risk involved. So let’s cut to the chase, how much money do you need to invest in VC? The government declares that you need a net worth of $1 million or a $200,000 annual income to be worthy of risking your capital in start-ups.

Simply put, we took money out of the equation, if you have the money, you’re an accredited investor, then let’s see if the risks are worth it to you to invest in VC. There are a number of risks associated with VC investments. To get a clearer understanding seek a professional’s advice, like that of Efraim Landa. VC investment risks are as followed: Read the rest of this entry

Types of Funding

Business Funding

Business Funding

There are many types of funding options for entrepreneurship. A few funding options are credit cards, savings, Venture Capital, and borrowing money from others. There are so many options available today that it is very hard to pinpoint which funding is best for the business you’re starting.  Knowing your options is half the battle. Once you narrow down a few of the options that fit your startup’s needs seeking expert advice is ideal, Efraim Landa can help in this area. Receiving funding from the wrong source can lead to wrong representation, and even worse, money loss!

Hoping to help you narrow down different types of funding options available for your startup listed are some of the most popular funding sources: Read the rest of this entry

Barbarians at the Gate – A Review

Barbarians at the Gate

Barbarians at the Gate

It is a common occurrence to hear of private equity buyouts these days. While some would like to place it entirely in a negative light, it can be beneficial for the business. Private Equity Firms such as Effi Enterprises may perform these types of financial activities to help recreate the business. There was a large number of leveraged buyouts (LBOs) that occurred in the 80s. It’s interesting to find out what triggered all of these buyouts and what the influencing factors were for their beginning and why they ended. It is also interesting to know the happenings after the companies were purchased. And what about the buyout firms; did firms like Effi Enterprises make any money?

At the very peak of the 1980s leveraged buyouts was Kohlberg Kravis Roberts’ purchase of RJR Nabisco. This buyout became the subject of a book written by two Wall Street Journal reporters, “Barbarians at the Gate.” It became a #1 bestseller in the New York Times. Later it was made into an HBO movie and was called by the same name.

The movie, Barbarians at the Gate retells the events that occurred during the largest leveraged buyout ever. James Garner plays RJR Nabisco’s Chief Executive Officer, F. Ross Johnson who is trying to buy out his own company. Much of the movie surrounds the power struggle between a Wall Street investment banker Henry Kravis and Johnson. Kravis wants to make Johnson take Nabisco over on his own.

It is a story of betrayal, high stakes and power struggles but told with great flair. It is well balanced with some lightheartedness and even playful tones at times. The movie gives us the chance to see a very different point of view of the behind the scenes goings on of leveraged buyouts. Rather than viewing these types of high profile financial transactions as an outsider with little understanding to what is actually going on in the company Barbarians at the Gate allows us to see it from the perspective of an insider. And in this case not just someone inside the company, but the man who sits at the top, the CEO.

It is sprinkled with dry humor, quite a bit of tension and subtlety. It’s a general look at a huge corporate game in which the losers all get $23 million – after taxes of course. The pace of the movie is great and this picks up nicely closer to the end of the movie as the story is building up to the climax. As the characters are all rushing around the audience is caught up in the energy of the moment, whether you already know how the story ends or not.

Screenwriter Larry Gelbart does an exceptional job of making F. Ross Johnson the protagonist. This is a difficult thing to do since he is a rich man who is deviously trying to get ahead of the game, this type of financial slight of hand that is despised by most. Mr. Gelbart is able to make Johnson into a rather likeable character in spite of his dealings. Of course he is made out to be someone who cares immensely for the company and the people and less for the money to be made. And Garner does a great job at playing a character which is mixed with humanity, greed, incompetence and good-naturedness. Kravis, played by Jonathan Pryce makes him out as more of a villain.

These were some very strong and captivating performances which opened up the world of F. Ross Johnson making it visible to the public eye. His morals are very much what is expected from the super wealthy are warped and the movie has several scenes which play this out nicely. The movie does a great job of presenting how he manages and even mismanages the buyout. It’s a high stakes game played between Kravis and Johnson and has all the drama that entails. And even though the vast majority despises such things as financial fakery that ends up with literally thousands of jobs lost, Barbarians at the Gate shares a perspective that is nothing less than thought provoking and entertaining.

What is the Difference between Vulture Capital and Private Equity?

The future of finance

The future of finance

There is a vast difference between vulture capital and private equity. But before the details are given we should look at a brief explanation of vulture capital. The term vulture capital is a slang term that is related to venture capital only in a negative connotation. Venture capital is a form of funding for businesses and especially an entrepreneur. When a business is just getting started a company such as Effi Enterprises will become a funding source so that the business has a greater chance of growing. Usually this is in exchange for a percentage of the company’s profits. The term vulture capital is when funds are placed into a business for the purpose of slowly squeezing the life out of the business. A vulture capitalist will have a primary goal of eventually forcing the company out of business and then selling it for a profit. In pre-Reagan days this was called a leveraged buy outs. However, recently some have tried to say that private equity and vulture capital are the same thing.

Different Investment Purposes

Private equity is an investment into a company. Generally, this investment is done through a private equity firm, an angel investor or a venture capital firm. No matter what category the investment falls into, each company will have its own investment strategies, preferences and ways of setting goals. The main purpose is to provide the funds to help the targeted company continue with expansions, develop new products or they may be used to entirely restructure the company’s management or operation.

Some say that private equity is “no better” than the leveraged buyout. However, in a leveraged buyout the vulture capitalist will buy majority control of a firm or business. Usually an investment in made into a business via angel investors or venture capital firms, not for gaining any control, but for the opportunity of investing in emerging companies or entrepreneurship. They will invest in a company, help get it established and up on its feet in exchange for a portion of its profits further down the road.

Profitability Goals

Private equity and vulture capital are both ways to pour funding into a business. The main difference is that private equity (and real venture capital) will also be willing to pour time and expertise into the company to help it succeed and grow; whereas the vulture capitalist will have the goal of purchasing the majority of the controlling shares in a company for the purpose of liquidation. They both are looking for a profitable return down the road. However, the private equity firm will obtain their profits from helping get the business established until there is a solid profitability from which they can draw. The vulture capitalist is looking to profit from the yields of a liquidated business which is going under. Most investors are looking to put money into a company like “seed” money in hopes that the company will benefit from the investment and be able to work to provide long lasting profits. Vulture capitalists will try to squeeze everything out of a business and the efforts are not at all aimed at the success of a business; but rather at gaining from the loss. Many Vulture capitalists will actually force businesses to go further into debt or incur new loans until their only choice is to file bankruptcy. At this time the Vulture capitalist will profit from the forced liquidation.

Are they Necessary?

In the real business world there is a place for both the private investor and the true Vulture capitalist. Each one of them can play a major role that helps strengthen the economy. Vulture capitalist can have a positive effect if they give a failing business a way to get out gracefully.

What is Angel Investing?

Angel Investing

Angel Investing

Angel Investing is a type of private investing in which funds are invested into start-up companies. These are much smaller amounts than Venture Capital funds which can range into the billions of dollars. Generally, angel investors invest between 25 and 50 thousand dollars into a deal. Efraim Landa has helped entrepreneurs for many years now by helping them locate this type of funding for an early stage company. One of the latest trends in angel investing is where a group of those interested in private investing pool their resources and capital together to invest in start-up companies. Angel investors look for investing opportunities which can yield large returns in terms of a 10 to 20 time potential return.

Benefits of Angel Investing

As a general rule, angel investors may choose to focus more on local companies. This is not always the case, however many prefer to place these types of investment funds into a local company because this makes it easier for them to become more involved with the company. Companies like Effi Enterprises which offer these types of funding for a company will generally become involved in some capacity with the board of directors. This is so that the company can benefit from their years of business experience as well as learn from their particular areas of expertise. This helps provide stability to the company that they are investing their funds in. It is a protective move for the investor; but also helps the company become better established and solid.

How are companies selected?

Selecting companies to invest in can be an arduous task. It can take a long time for an investor to decide which of the companies will benefit most from the invested funds. Investors are very selective and many times weed out 80 to 90 percent of companies who are applying simply because the company does not meet their criteria. The other 10 percent or so can then be narrowed down to just a company or two that Angel Investors will contribute to. For this reason it is very important that the entrepreneur present a thorough business plan when requesting this or any type of funding. Once the companies are selected a thorough analysis will be made of the company. This is a lengthy process as the business must be evaluated from every possible aspect.

Investing for Returns

Angel investors will contribute to a business that they feel they can get a substantial return from. This means that it is a very tough process. The asking company must be able to establish and explain details on items such as liquidation preferences, anti-dilution clauses and board seats. Angel investors do not want to dump money into a company and walk away hoping it will turn into profits. They are making and investment of their money along with their time to help the company succeed. When the company succeeds, so will the investor. In our present economic climate it can take a longer period of time to realize substantial profits from an angel investment. So they will want to invest in a company which has lower levels of risks. Those who offer venture capital will not require as much from a business, and they will not be as involved in the business once the investment has been made.

Angels who invest in your company will take an active part in helping it succeed. Angel investing is not like a loan any other form of debt financing; it actually gives another party ownership interest in the company. An angel investor will be looking for a company with a huge potential for growth and profits. This will be an entrepreneur who has plans of expanding their businesses. Generally this type of investor will take equity in your company and then when it is sold or if it grows to the point of going public they will take their gain.

What is Private Equity Investing?

Private Equity Investing

Private Equity Investing

Before a company is publicly traded on a stock exchange it remains a private equity company. Effi Enterprises is experienced in private equity financing for start-up companies and emerging companies who have not yet gone public. Even though private equity investments can be contributed to any type of company, Efraim Landa and Effi Enterprises offer private equity investments specifically to companies which are involved with developing and implementing of high tech medical equipment.

Private Equity Investing

Sometimes an individual may be a private equity investor, but generally a private equity fund is set up by a group of investors who all contribute to a private equity fund. Once the fund is established it is used to support the investment in the company. Most generally, a private equity fund is used to support a variety of investments which are used to purchase the controlling interest in multiple companies. Each contributing investor receives portions of the profit that is generated from the investments. The portion of profit each one receives is proportional to the size of their investment into the fund. Effi Enterprises contributes private equity investments in start-up and emerging medical companies.

Strategies for Investing

There is a considerable amount of strategy that is involved in making investments of this kind. Basically there are three types of strategies. One of the most common is to raise venture capital which is funds that are invested in a startup company that has a great potential and a high probability of being successful. The goal of this type of private investing is that the company will become profitable enough to eventually go public with its investing possibilities. A second type of private investing is growth capital which is invested in a more established business with the intent of helping it expand its services. And the third type of private investing is where several investors put funds together to implement a Leveraged Buyout (LBO). This is a purchase of a company that is either losing money or is underfunded. Effi Enterprises is a private investor in companies and they can also offer their expertise in the area of counseling companies on their available options.

Private Equity Investing and its Advantages

The main advantage for those who engage in private equity investing is that those who contribute are directly involved in the control of the company. They do not have to please any shareholders so they don’t have to worry about any other outside interests. Nor do they have to justify their decisions to another party. This allows the company to concentrate on their long term productivity and a more gradual build up of profits. This aspect can be advantageous to the company too. And investors are more likely to enjoy larger dividends when the company expands to the point of going public with their investments. Private equity investors earn money through their investment in private companies. And then the company benefits from the investors experience and expertise such as Effi Enterprises who can contribute business savvy which can help the company succeed.

Private Equity and the Economy

Private Equity and the Economy

Private Equity and the Economy

Private equity can be very beneficial to the economy. Private equity is generated by investors who put their monies together and invest in various businesses that they think have a high potential for growth and improvements. They collectively work together to help the business grow. The whole point is to provide funding and operating costs to companies in exchange for a percentage of its profits. Effi Enterprises helps identify investment opportunities for private equity companies and offers operating expertise and advice for companies.

Private equity is helping the economy by providing many instances of job creation. Recently, according to the Bureau of Labor Statistics there has been a slow decrease in unemployment and small to mid-sized businesses are showing a hiring increase. This is due to private equity which is developed and implemented for the purpose of helping businesses succeed before they are large enough and established well enough to go public with their investments. Private equity is put into a company to provide financial stability so that the company can work on developing new products or expand. These lead to more jobs being created.

The Association for Corporate Growth indicates that there are over 4 million jobs in the US which are directly being funded by private equity and experts are predicting that this trend will only increase in the next few years.

Private equity is provided for a business by groups of people who have the business savvy and experience to help bring about economic growth. This type of funding is specifically for companies who need financial resources in order to expand or otherwise grow. Investors are choosey about where they put their funds and generally only invest them in companies that are expected to have great success and experience growth in the future. Then as the businesses grow, jobs are created and the economy is strengthened.

Private equity funds are meant to last for a short period of time. The goal is the growth of the company. In one sense the company is expected to outgrow private equity and need public funding. This means that the intent is for the company to be sold within just a few years. It is not meant to be a permanent situation. The investors have controlling interest in the company and offer their expertise to help ensure the company’s growth. Effi Enterprises can provide a wide range of expertise and experiential based knowledge which can be beneficial to a company’s growth. Since the investors are primarily interested in the growth of the company they want to ensure that value is created for that company. The greater a company’s value the easier it will be to get it into the public investing realm. As the worth of a company climbs, it will generate a positive impact on the economy.

Private equity firms like Effi Enterprises offer a business many different types of marketing strategies. The board can offer a company the funds to help them with expansions so that profits can be generated. Their whole goal is to eventually put the company out for public investing. The investment team will then be working diligently through many techniques to help the business succeed. Effi Enterprises can help a company establish a solid business plan, prepare and review financial projections and offer hands-on management and leadership. The success of a company and its positive impact on the economy are factors behind private equity funds.

What is Effi Enterprises?

 

Private Equity

Private Equity

Effi Enterprises was established in 1993 for the purpose of helping emerging companies in a wide variety of ways. Efraim Landa, who co-founded the company, is also an entrepreneur and understands many of the difficulties that start-up companies must deal with to become successful. Effi Enterprises has a goal of helping create value for customers.  Effi Enterprises has been offering expert help and advice to emerging growth companies and seasoned companies in both the United States and Israel. They are in the business of consulting and offer private and finance equity specifically to high tech companies as well as those in the medical field.

Entrepreneurships are difficult in the very best of situations. But when it comes to the financial aspect it can get very complex. Effi Enterprises has experience with helping businesses with these planning and decisions in a wide variety of ways. They can bring hands-on managerial experiences to the company as well as offer many different types of leadership interventions.  They can also help in areas like negotiating licensing.

One of the most important activities that an emerging company must do to be successful is create a business plan. Effi Enterprises can help with this procedure to ensure the proper information is included.  The business plan can be an integral part of obtaining various types of investments such as Venture Capital. Having a solid business plan in place gives the business some real numbers and information that can be shared with potential investors. It can make or break a deal.

They can also help start-up businesses or entrepreneurs explore and secure various other types of financial funding.  Using strategic planning experts can help a business with private equity financing, divestitures, and IPO’s. They can also offer their expertise in the area of developing and implementing marketing strategies.

Effi Enterprises has been largely involved in the medical market and those which develop high tech medical equipment. Co-founder Efraim Landa has a strong foundation in this arena as he has worked with companies which develop technological equipment such as pain free glucose meters and cardiac imaging equipment. Effi Enterprises has worked with companies such as Health Center Imaging of Fairfield County, LLC, CMT Medical Technologies LTD and Philips Medical.

With their broad base of experiences with various businesses in different stages of growth they can help companies establish a service network, a direct sales force or a dealer network. The expertise and experience helps them know how to handle making financial projections or developing divestiture strategies and other strategies to increase revenue. They assist by providing short term or long term management assistance.

With the experience behind Effi Enterprises they do not use a cookie cutter approach but instead tailor make plans and strategies to fit the needs of each individual company. The company was formed and continues to provide management consulting services which are specifically pertain to capital formation and marketing strategies. Effi Enterprises is dedicated to helping entrepreneurial companies in the ways that will be of the most benefit to the future of the company.

How to Get Financing for a New Company

Private Equity financing

Private Equity financing

One of the most difficult challenges an entrepreneur faces is raising capital for start-up. Efraim Landa is an entrepreneur who has faced these financial challenges and co-founded a company who can offer advice for start-up and emerging businesses. The first thing that needs to happen is that there must be a clear-cut business plan in place. If the business has no plan for success investors and other possible financing options will not be as quick to “buy in” on the idea no matter how good it is.

Business Plan

A business plan should inform potential investors about how the business will function, how profits will be realized and a projected growth rate. These must be reasonably stated and if possible include research data. A business plan should give potential investors or lenders a good look at the company’s real potential. Without a proper business plan investors will not have anything concrete on which to base their decision of whether or not to invest in a company.

It is important to create ways to present the company’s information through a presentation. It should include information about your project, the market and marketing strategies, and how the business will be managed. Also explain why the product is important and why it will sell. This, in conjunction with a well written business plan can be the “selling point” for a business.

Potential Investors

After the plan is in place it’s important to identify any potential investors. There are many options and companies like Effi Enterprises that are established to help entrepreneurs find investors. They can provide the guidance needed and they are also private equity investors. Get informed on the options available and pursue the routes that seem most productive.

Company Valuation

A term sheet should be created which outlines why the company is a good investment. This will include a valuation. If it is uncertain there should be at least a reasonable estimate of the company’s worth. Investors will be interested in helping establish a business in which they will be able to reap financial benefit in the long haul.

Investors

Angel investors are usually individuals who are willing to offer start-up financing for a new business. Venture capitalists offer financing options for new and start-up businesses in exchange for controlling interest and a portion of the profits. There are several types of private equity financing options available. It may be in the company’s best interest to work with a consulting business such as Effi Enterprises which is a company who helps start-up businesses locate various types of funding options. They can also help with preparing or reviewing business plans. One area in which a business needs direction is in locating angel money and other sources of business capital.

Getting Started

Once a firm or individual is located which can help provide financial backing for the business, set up an appointment. Be prepared and present the business plan and the proposition is a very honest manner. Let them know how the business started and how it is functioning presently. It is important to convince them that the company is a good investment. Be prepared to discuss how business strategies, investment strategies and financial arrangements will be handled. It is imperative that the potential investor can see the progress of the company so far and its great potential for profit.