Readily available Capital capturing Private Companies
Venture backed companies are increasingly choosing to stay private longer. In part driven by the readily available capital which is in need of deployment and in part due to the historically low interest rates which are providing attractive funding terms. Investors, be they private individuals or large institutions, are on the lookout for sensible returns. The public markets are proving more volatile than some may be able to endure. As a result investors are increasingly expanding their allocation into the private markets.
All good news for the CEOs looking to drive forward their venture, without the additional hassle of strict regulation, extensive reporting, high costs and scrutiny which comes with transitioning a company into the public market.
Growing VC to PE Buyouts
This, in addition to the rising percentage of venture capital to private equity buyouts, fuelling the very real possibility to stay private for longer. According to a report by Pitchbook, private equity firms are increasingly sourcing their technology investments directly, lured by the rapid growth and strong returns realised by these technology companies. For example, in the US market, VC to PE buyouts account for over 4% of all buyouts. This has led to a new breed of venture capital backed acquisition targets. Those that show strong revenue records, an established workforce led by a reputable management team and a history of solid value creation.
A Trend Here to Stay
By staying private for longer, venture capital backed companies have the opportunity to drive their strategy for longer. Private companies also have more freedom to choose the investors or indeed, the type of investor they prefer to have on board. Making the business relationship far more personal than going down the public route for raising capital. This, in addition to avoiding the high expense and risk of going public, makes remaining private an attractive place to be. A trend which is here to stay.
We are an independent & registered investment management advisor / co-investor based in Zug, Switzerland. We offer fundraising and co-investing services to post-seed, revenue-generating private companies based in Europe
By ensuring no conflicts of interest, our business model develops long-term relationships with like-minded business partners including Founders, CEOs, Entrepreneurs, PE Firms, Strategic Investors, Asset Owners, Private Banks and Specialists.
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