Why It Is Important To Impress The Angel Investors

Securing a private equity investment is a huge thing for any company. All that hard work and sweat that was put into the company gets finally recognized and for most companies securing the investment is a lifelong dream. However, a lot of people fail in securing any kind of funding because of their ill-preparedness or because they might not be the correct fit for the firm which they have approached. The decision of funding a new project or company is mostly finalized by the angel investor who is willing to take the risk and help the company build an empire. A lot of concentration might be given to a pitch but the most important person to impress is the angel investor himself.

What Are Angel Investors?

Angel investors are usually the ones who provide the capital and approve the funding after a pitch. While they could be known as high flying lenders, the investors are more focused on the entrepreneurs’ vision rather than the business’ viability. While some investors engage in crowdfunding platforms using their influences, other investors build internal networks to raise capital. They are also known by angel funders, private investors, business angels, and seed investors.

Tips to Impress Angel Investors

Angel investors are trickier to crack than venture capitalists as they use their own money, unlike the latter that are in charge of their firms’ money. Most private equity firms in India are operated by angel investors in lieu with international venture capital firms.

One of the most important things for an angel investor is the feasibility of the business opportunity. Convincing an angel investor that the product or startup can be a force in its sector can work wonders for your funding. That, coupled with market research is a sure-shot means of securing your funding. The other thing that is very important in a pitch to an angel investor is the oratory skills of the entrepreneur. Convincing the angel investor that your dream needs to be a reality and the passion you bring in your pitch can make or break your chance of securing money for your venture. All these tips can help you provide the perfect pitch and get your preferred angel investor on board.

5 Venture Capital Market Trends in India

India is the hub of private equity (PE) and venture capital (VC) investments owing to the technology sector that is progressing at neck breaking speeds. In the past 3 years or so, India has seen more than seventy percent of the total PE and VC activity across the globe. Logically, venture capital and PE funds in India are big. Here are the top 5 venture capital trends in India:

1. Technological is Growing

Most sectors that contribute to the economy of India function extensively on technology, which has changed the way organizations and institutions operate. The services sector requires innovations in cloud, mobile, and social technologies to reduce operational costs and satisfy the customers. This presents an opportunity for investment via venture capital funds. Publishing, advertising, marketing, logistics, travel healthcare, education and the financial services industries are subject to these investments.

2. Indian firms are expanding overseas

Indian B2C companies are expanding overseas to increase their customer base and bring in more profits. This has been possible with the increasing use of internet and national boundaries breaking. With the help of social media, companies are reaching out to potential customers across the globe. As the demand for products increases, venture capital fund investments opportunities also grow. Investors are looking towards companies hoping to widen their horizons.

3. Growth of digital currencies

Indian markets have finally begun to accept digital currencies like Bitcoin, which will transform the modes of payments in the next decade. The blockchain technology behind Bitcoin is a great warehouse of venture capital funding. This is happening in tandem with demonetization in India that has already digitized currency.

4. Innovations in hardware

The demand for gadgets and accessories has witnessed an exponential rise. The Indian youth is tech-savvy and connects invariably over social media platforms via electronic gadgets, especially the smartphone. This is where VC investments are subject to a rise amongst interested investors since these gadgets create a universal chain. Gadgets such as GoPro cameras, smart watches, smart speakers and like are quite popular in India. These gadgets yield high returns with minimal investment.

5. Real estate opportunities

Real estate has been at the forefront of investment for a long time now. It has its ups and downs but relatively recent options like Systematic Investment Plans (SIP) have made investing in real estate funds a rising trend on a rise in India. Moreover, Make in India has made it simpler for construction companies and investors alike to reap its benefits. Finally, real estate funds offer a sizeable investment option for VC funds.

Types Of Investors In Private Equity Sector

The field of private equity investment is an elaborate one which requires extensive knowledge and experience to effectively navigate without losing the way and vision. Primarily, every investor needs to know about the two asset classes that exist within the market—public sector and the private sector. The public sector is openly available to the general public and open to investments from all, and if an investor has the right amount of money, they can invest their money to a certain limit in a company. The private sector, on the other hand, is not openly available to a common man. Commonly known as the alternative asset class, private sector includes various kinds of assets within it, namely private equity.

India has a huge private equity sector for investments. The primary reason why these assets are held in such high regard is the fact that they generate high returns in less time. In order to cope with their expenses and expansion plans, every business requires investors from both the asset classes. Each of these classes works in a unique way, but more importantly, there are also various kinds of investors working in this area. Here are a few of the investors that one should know about:

Institutional Investors:

Institutional investors work for a private equity firm that invests in equity and various different kinds of funds. These types of investors do not invest money from their own pocket, but they do not restrict themselves to just providing the capital. Along with that, these investors are also involved in the management, administration and general overhaul of how the company works.

Leveraged buyout investors

They typically buy the controlling stakes alone or in partnership with other PE firms. Most Private equity funds in India find it the most secure method to invest money as they usually invest in companies with a stable cash flow. Yes, this does involve, taking up the little bit of loan but it is worth it as the risk factor is reduced due to the involvement of multiple parties.

Angel Investors:

The name is self-explanatory. It tells us what kind of investors they are, that is, like angels for a businessman. Unlike institutional investors who invest the firm’s funds, angel investors invest their own funds into a company. These are usually wealthy individuals who are looking to make profits by investing in companies with the huge potential to succeed but don’t have the funds to function efficiently and generate revenue.

Why It Is Good To Invest In Private Equity?

Most white collar employees explore ways to invest their hard earned money which is mostly lying around in bank accounts. For most of the population, a fixed deposit account is the way to go but there are other ways to reap as much as 50% return.

Fixed deposits might be a safe bet but it strips off you from other advantages equally. The first one being that your money is permanently locked for a specific amount of time depending on the duration of your account’s term. Number two problem is that the yield that you receive will be set off due to an effect of inflation.

Equity investment is a great way to reap much more benefits that you have ever expected. Private equity funding is a process that takes money from big and small investors and invests that money in startups and established companies. The term Private equity is generally used to describe all types of funds that pool money through the investors in order to gather a large sum of cash that can be used to acquire stakes in the companies at different stages of their maturity.

Here are some types of equity investments:

• Venture capitalist who only invest in startups to buy stakes that they can sell after the IPO.
• Angel investors are individual investors who invest in startups and are usually the major investor in the company and have controlling stakes.
• Growth equity funds fuel the expansion projects of well-established companies who seek large amounts of money for a particular project that capital intensive in nature, usually required for growth of the company.
• REITs are short for Real Estate Investment Trusts and as the name suggests such funds accumulate money from investors generally with deep pockets and invest in big residential and commercial projects.
• Leveraged buyout funds tend to invest in mature firms with rather stable cash flow generally in partnership with other private equity firms. They typically buy controlling stakes in companies and employ several techniques to create value.

Most of the investment takes place through these funds but the minimum amount that can be invested is usually large which is not suited for small investors. If that is the case then a mutual fund is a very attractive option that yields good returns with systematic investment planning option.

A Deep Understanding Of Private Equity Investment

Private equity is the investment made in private companies or publically listed companies which become private as a result of investment by a single firm or multiple firms. An investment in PE funds can be a very safe and secure to make some prominent profits. It requires proper strategy so that it can turn out to be fruitful in near future. The strategy is planned in various stages which can be planned according to the situation a company is in. The planning is done in stages like the target companies, the sectors for investment, the target geographies, the sectors for investment, and the Added value to the firm.

Types of equity:

Venture Capitals: This type of investment is done in the companies and product which are promising for the future and require an investment in the company. This kind of investment follows a well defines strategy and usually private equity firms in India like to follow this particular approach as it yields good results.

Growth Equity: It is an investment in private equity so as to develop the business to new verticals and expand the growth of the company. This is generally done in growing companies which have gone through its basic phases.

Buyouts and distressed investing are the stages of investment where firms earn more money. Distressed companies are bought out with some investment from firms and some on loan from banks which is paid back from asset liquefaction and cash flow out of the company.

The three major stages of strategy for a private equity firm are:

Fund’s Target Sector

Private equity firms have to realize the basics of investment and target the sectors which are about to grow most in the coming decade. The major sectors for the growth are healthcare, insurance, and technology or real estate in India.

Value Added by the Firm

The firms are an existing business organization in themselves which can guide a new company with its business development. A particular expertise in any field of the firm helps it decide the specialty of the sector they want to invest in.

The Geographical Target

The firms have to realize that what part of the world is most suitable for the type of business they are investing in. The technical companies need to be in big cities while the investment in tourism has to be in the suburbs. The firm which decides upon this swiftly is a profitable organization.

Finding The Perfect Private Equity Fund

There are many top companies out there providing private equity funding around the country. Some of them bring international funding, while others provide a more management and strategic approach. For founders and asset owners, the problem becomes multi-fold when they’re pitching to multiple organizations and they have deals that are structured in multiple ways.

Private equity fund pitching is an arduous process involving multiple meetings and sit-downs. The strategy may need to be edited, and other times the pitch may need to be completely customized. That’s why finding the perfect private equity fund depends on what’s right for you. Whether that’s having the right international partners, or providing a constant cash flow, what works for you may not work for others.

Companies like Everstone work with entrepreneurs and private fund applicants, to determine the best way forward. This approach works best for all parties involved, making it important for entrepreneurs to be clear about why they require funding. That’s the best approach when finding the perfect private equity funding option.

Another aspect to remember is what you require apart from funding. Maybe its access to different networks, or maybe it’s finding the right mentor. If you’re unsure about what you need, then figuring out the secondary needs from a private equity fund is key. Whether you’re looking for assistance with business expansion or want to get guidance from their industry experience, that should play an important role when deciding.

If you have multiple offers on the table, then the last aspect to consider is relationship development. If one PE fund was more welcoming than another, that’s a good factor to add into your decision matrix. The level of communication and advice you receive now, may continue for the duration of the relationship.

How To Make Money Easily Through Private Equity Investment?

If there is one way to earn good money in shortest amount of time, it is through private equity investment. Though, such investment promises good returns, but can also lead to big losses if not done right.
To put it straight, private equity is a process of investing and acquiring ownership in companies so that they can get high investment returns in the future.

It is a source of investment capital for high net worth individuals. Investors that are partners with private-equity firms raise funds and manage money to get favorable returns from their shareholder clients. In India, real estate funds are raised by investors to develop new products, technologies, and working capital.

In the past few years, private equity firm in India has been top performers at accounting and various law firms, which is why they have been able to successfully attract best corporate globally. There are two major functions of any private equity fund firm.

First is transaction execution and the second is portfolio oversight. Deal origination or transaction oversight involves developing and maintaining mergers and acquisition with intermediaries. It’s the job of private equity professional to secure the deal flow and maintain it in terms of both quality and quantity. Some firms also hire internal staff to reach out to company owners for generating transaction leads.

Transaction execution typically includes assessing management, historical finances and forecasts, and valuation analysis. This part of the process is critical as consultants might turn out to be incompetent or dishonest who won’t disclose the previous liabilities and risks.

Overseeing all the management and procedures is another part of equity management. It involves managing teams and support firm’s various portfolios. Well-managed support work can help equity investors in making successful strategic plans. They can help in institutionalize procurement, accounting and IT systems to increase the value of the investment.

Private equity firms have given wealthy individuals and institutions an opportunity to make attractive investments. In order to secure strong deal flow, these institutions must develop a strong relationship with transaction and service professionals.