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A private equity fund is formed through a financial intermediary that raises funds from professional investors. These resources are allocated to various companies or projects that have a high growth potential.
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In short, what a private equity fund does is to provide resources to companies and projects that have a high growth potential so that with those resources, and the active participation of the fund, they can define the strategy. In this way, the company generates value and executes a business plan that allows it to grow at an accelerated rate.
Such funds become temporary partners, injecting the capital required by a company at different stages of its "life", when it needs it most, in exchange for a portion of its shares and rights.
These shares and rights allow investors to ensure that the business is well managed and to seek the expected returns. This is something that investors control perfectly, which will add value to your business, as they will ensure that your project grows.
Private equity refers to investment in a private company in exchange for a majority stake in the company.
Private equity firms often take an active role in managing the projects in which they invest.
When a private equity firm makes an investment, as a rule the money from all investors is pooled into a fund, and then used on behalf of the fund, not a single investor.
These private equity funds often include high net worth individuals, insurance companies, pension funds and foundations.
In contrast, venture capital funds are technically a form of equity financing. Private companies with institutional investors buy a stake in other companies with the aim of making a profit.
Venture capital firms often specialise in investing in young companies and startups to help them get off the ground and grow.
The projects for which venture capital firms raise funds often do not have access to more traditional sources of capital, such as banks or public markets. Venture capital funds therefore become an optimal alternative to be able to develop these projects.
In Spain, this investment model has grown exponentially. Investors allocate their capital to operate in companies with high potential through long-term investment, and most of their investors are institutional.
The average investment per company ranges from one million to 100 million euros and these types of projects are mainly start-ups with an innovative vision and where technology is a crucial tool.
A private equity fund works by injecting a financial contribution that varies in amount depending on the circumstances of the specific company. Their objective is always to multiply the value of the company in which they invest and generate a return in the short, medium or long term in the form of profits for their investors.
It should be borne in mind that these funds are usually made up of a wide range of investors. It is true that there may be entities that belong to only one family, but there are usually many different investors that come together to create a group.
In this way, an investment fund will first study the state of the company requesting the investment. If there is an opportunity to make profits, it will make the investment with the aim of making the company grow, and in turn, expecting a return of profits. This is the main objective of its activity.
In the private equity industry, these funds not only trigger growth and innovation in the entrepreneurial ecosystem. They even accompany the growth of a new company until it consolidates in its industry.
In many cases, private equity funds require a lengthy process to validate any given investment. Experience has shown that DEXTER Global Finance has also managed to remove this obstacle for entrepreneurs who, based on solidity and consistency, seek economic backing and a financial injection for their activity and their projects.
It is important to bear in mind that time is of the essence in a company's activity. In many cases, a good business opportunity is not available for a long time, so the necessary resources must be found to take advantage of it as soon as possible.
DEXTER operates with agility and short response times. This speed is key in the business world. That is why DEXTER's financial products, from reliability, have managed to take root in the Spanish national and international fabric. In addition, they have tools to make credit repayment more flexible, another aspect that is important for many companies that approach this means of financing.
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London EC2A 4NE, United Kingdom
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