A peek at the set of parameters that influence the investment decisions of most PE players
If you are a promoter of a firm, what do you
really need to showcase to prove Private Equity (PE), which is currently booming in India? How do you become a Gokuldas Exports or Allcargo, both of which have successfully wooed one of the world’s largest PE players, the US-based Blackstone? The trick, it seems is to convince investors that you offer an almost perfect and appropriate investment opportunity and that, over the years, the valuation of your firm will grow substantially by domestic wealth standards, which may or may not be so based on global standards. However, to achieve this objective, all promoters, who wish to attract private equity, should ask the one basic question: what do private equity firms look for in a start-up or a mid-stage venture?
Deepak Dayal (Vice President, First Tier Capital) avers, “While one cannot pinpoint a single determinant of success, yet the focus for PE firms is on two core areas, the capabilities of the management team, and the prospects for sustaining and defending the company’s revenues and profit formula.” This sounds quite logical; in fact, investors pay a lot of attention on the quality of top management than to any other factor when they decide to invest in any firm. Some experts argue that of the 10 parameters that are taken into account before investing in a firm, eight are directly or indirectly linked to the management team in place.
If you are a promoter of a firm, what do you
really need to showcase to prove Private Equity (PE), which is currently booming in India? How do you become a Gokuldas Exports or Allcargo, both of which have successfully wooed one of the world’s largest PE players, the US-based Blackstone? The trick, it seems is to convince investors that you offer an almost perfect and appropriate investment opportunity and that, over the years, the valuation of your firm will grow substantially by domestic wealth standards, which may or may not be so based on global standards. However, to achieve this objective, all promoters, who wish to attract private equity, should ask the one basic question: what do private equity firms look for in a start-up or a mid-stage venture?Deepak Dayal (Vice President, First Tier Capital) avers, “While one cannot pinpoint a single determinant of success, yet the focus for PE firms is on two core areas, the capabilities of the management team, and the prospects for sustaining and defending the company’s revenues and profit formula.” This sounds quite logical; in fact, investors pay a lot of attention on the quality of top management than to any other factor when they decide to invest in any firm. Some experts argue that of the 10 parameters that are taken into account before investing in a firm, eight are directly or indirectly linked to the management team in place.
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