Equity Finance
What is equity finance?
Popularised by hit television show ‘Dragons’ Den’, equity finance, sometimes known as risk capital, is where a private investor supplies capital investment in return for a share of the business’ equity, often assuming an element of control over the business. This commercial finance solution is generally a medium to long-term cash flow solution and can be hugely beneficial to a business’ finances provided they find the right equity sponsor to meet their needs.
What are the benefits of equity finance?
- Unlike a business loan, which is repaid on a monthly basis, the venture capitalist earns dividend payments, ensuring their commitment and dedication to boosting your company’s success.
- Private equity investors provide expert advice and business support to help run the business.
- How much control the investor has depends on the terms of the contract agreed in advance. As a rule of thumb, the more they invest the higher share an investor will expect.
Which equity finance solution suits my business?
As with any business funding solution, there is a range of different private investment options for companies to choose from to overcome their cash flow problems. Hilton-Baird Financial Solutions will identify the right methods of raising working capital.
Business angel investors provide early stage business investment to help fledgling and growing businesses get off their feet. Business angels therefore provide equity capital to companies seeking up to £2million of seed capital to boost the business’ cash flow.
Venture capitalists invest private capital to companies seeking a minimum of £2million to boost their business’ cash flow in return for equity, whilst further providing valuable insight and business support to make it easier to source other funding solutions.
Growth capital provides private investment to specifically help your company expand in return for a share of the business, supplying additional capital to fund any mergers, acquisitions, management buy-outs and management buy-ins.
Turnaround capital supplies equity capital to help a business overcome its cash flow problems. The venture capitalist additionally provides support and financial management to support the company going forward.
Depending on your business’ funding requirements, your company will be eligible for a number of different funding solutions to provide working capital.
With more than 13 years’ experience in sourcing business investment, Hilton-Baird Financial Solutions could introduce your company to the venture capitalist with a proven track record of funding the success of a range of businesses from around the UK.
Call us on 0800 9774833 or email info@hiltonbaird.co.uk to find out more about the advantages of equity finance.