Equity investors can bring a lot to the table that can bring big benefits................
SMEs Are Reluctant To Take On Equity Investors – Why You Shouldn’t Be
Some SMEs are reluctant to take equity investors on board because they are concerned that they will not find a partner.
They are concerned that there is a sizeable cultural gap between them and the investors and for many reasons that is a well-justified concern.
Investors don’t necessarily speak the same language as the entrepreneur. They will not have the detailed operational experience in the business, but they look at it from a more financial perspective. And from a structural perspective, most equity investors have a limited time horizon in which they have to then exit the investment. Quite often that is a five year time horizon which may not work very well for that SME.
So those are reasons why SMEs may be reluctant to get involved with financial investors.
We would recommend for investors to think twice. There is a large market out there, large universe of investors, Perwyn as an example, are very much interested in the development of sustainable value. We operate an evergreen fund structure. We are not limited to a five year time horizon, but we are quite flexible to adjust the time horizon of our investment to the requirements of the SME.
In addition to that, Perwyn has operational skills in their ranks. That changes the engagement model with the entrepreneur.
We talk about the business, the organisation more than necessarily the financials which helps to close the cultural gap and starts the development of a partnership with a view of creating value for the entrepreneur and the investor over the investment horizon.
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