Private Equity

In some cases, the management team may be able to secure financing through a private equity firm.

However, private equity firms prefer scale and tend to invest in larger transactions.

Their investment may consist of buying shares and/or providing additional funding such as loans and asset-based financing. Keep in mind that the private equity firm may have objectives that differ from those of  the management team.

Private equity firms usually want a liquidity event after 3 to  6 years.   They look to exit the transaction in that time frame, allowing them to realize their gains.

Consequently, their funding programs often include  stipulation of how the company is to be run and what objectives have to be met.