Venturer or Vulture

The turbulent financial market that has recently descended upon us means that for those organisations looking for development or acquisition finance may find that the debt lines have dried up somewhat and equity dilution is the only option. That isn’t to say that the financial institutions will be awash with funding but when secured debt becomes either unpalatable to the provider or simply not an option, private equity – (if the deal is right!) may become a real alternative.

Although my motto is never give away today what you can sell tomorrow, sometimes the only way to make a deal fly is to take an equity dilution. In other words, share the corporate cake with an institutional investor. No one would necessarily pick this type of investment as a first choice but if you are faced with Hobson’s choice then it is best to be prepared. Know what to ask and when and most importantly know what to expect and what is expected from you and your business. So…..first things first.

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