Jeffrey Lermer- Accountant, tax advisor, grafter, fixer’s Post

Here are some of the most common domains within Private Equity: 1. Buyout Focus: Acquiring majority control of established companies, often through leveraged buyouts (LBOs). Strategy: Improve the company’s value through operational efficiencies, strategic changes, or financial restructuring, and sell it for a profit. Target Companies: Mature companies with steady cash flows and growth potential. 2. Venture Capital (VC) Focus: Investing in early-stage startups and high-growth companies, often in technology, biotech, and innovative industries. Strategy: Provide capital in exchange for equity, helping companies scale rapidly in exchange for potential high returns. Target Companies: Startups with high potential but high risk, often with no profits yet. 3. Growth Equity Focus: Providing capital to relatively mature companies that need funds to expand without taking on additional debt. Strategy: Invest in minority stakes, helping companies scale or enter new markets. Target Companies: Companies that are already generating revenue but need capital to fund growth. 4. Distressed/Turnaround Focus: Investing in companies facing financial or operational difficulties, often at a discount. Strategy: Restructure the company’s operations or finances to restore profitability, sometimes through bankruptcy or reorganization. Target Companies: Companies in financial distress, underperforming, or near bankruptcy. 5. Real Estate Focus: Acquiring and managing real estate assets such as commercial buildings, residential properties, or land. Strategy: Add value by improving the properties, managing leases, or repositioning them in the market. Target Properties: Commercial real estate, hotels, multifamily housing, and industrial properties. 6. Infrastructure Focus: Investing in physical assets that provide essential services, such as transportation, utilities, energy, and communication networks. Strategy: Often long-term investments with stable returns, focusing on operational improvements and cost efficiencies. Target Assets: Airports, toll roads, energy grids, water supply systems, and telecommunication towers. 7. Secondaries Focus: Purchasing stakes in existing private equity investments, typically from other investors. Strategy: Buy these investments at a discount, giving the original investors liquidity, and benefit from the asset’s future growth. Target Investments: Interests in private equity funds or portfolios of private equity-backed companies. 8. Fund of Funds Focus: Investing in a diversified portfolio of private equity funds, rather than directly in companies. Strategy: Spread risk across multiple private equity funds, offering investors access to a broad range of managers and sectors. Target Investments: PE funds across different domains like buyout, VC, and growth equity.

New to startup investing? Learn the basics and benefits of Equity Investment. Build your dream investment portfolio Here! What is Equity Investment? “Equity is thus defined as a stock, share, or any other security representing a person’s ownership interest in a company. When one owns a company’s share, they are a part owner of the said company”. The simplest way to understand equity is to look at it as a fundraising activity started by a company. Instead of availing an interest-heavy business loan, a company collects money from the general public. People can then buy a partial share of the company as an equity investment. Once shares are purchased, you receive a dividend of the profits earned by the company. What are the Equity Options Available? 1.Equity Shares: When a company wishes to have its shares traded in the stock market, it makes an initial public offering (IPO). Equity shares represent a portion of a company’s value that investors or shareholders own. 2.Equity Mutual Funds: Another popular equity investment method is through equity mutual funds (MFs), an investment instrument that pools money from several investors and then invests in a company’s bonds, stocks, securities, etc. Benefits of Equity: Diversification: Equity allows investors to diversify their portfolios according to asset classes, including stocks, bonds, real estate, etc. Liquidity: Liquidity refers to how instantaneously the buying and selling of stocks takes place without impacting the actual stock price. Equity tax benefits: Investors are exempt from paying long-term capital gains up to INR 1 lakh earned in a year from selling their equity shares. Returns on equity : Equity investors benefit from focusing on investment for at least five to ten years to yield higher returns. Dividend income: Equity investors receive dividends from the company’s net profits. Dividend income above INR 5,000 in a financial year is taxable at 10%. Bonus shares: A company issues bonus shares to gather more equity funding while rewarding existing shareholders with free additional shares. Ownership of equity shares: A company distributes shares to its owners or shareholders against their purchase of shares. Equity Loan: Equity investors can keep the shares they hold in their account as collateral to obtain various loans. Risk management in equity: Equity investments in stock or mutual funds allow investors to control the risks associated with an investment. How to Begin Investing in Equity? Committing to investing money or capital is a significant decision in anyone’s life. Hence, it should be entered into with great thought and planning. The idea behind investing money is to create an additional source of income and generate a sizable amount of wealth for your future that grows over time and appreciates in value. Contact Us: Website  : www.spinvests.com Ph      :  +91 81001 29292 Email id : [email protected]

Raising Financial Capital by University of Cambridge: Are you navigating the complex world of raising financial capital for your startup? Simon Stockley from the Cambridge Judge Business School has distilled the essentials into a powerful guide to help entrepreneurs succeed. Here are the key takeaways: Key Takeaways: 1) Strategic Planning: Answer crucial questions such as how much you need, when you need it, and from whom you will raise it. Planning is everything! 2) Funding Sources: Understand the different sources available, from venture capital to debt finance, and choose what’s best for your business. 3) Cash Burn Rate: Be aware of the ‘Valley of Death’—the critical period when expenses outpace revenues. Manage your cash flow meticulously. 4) Valuation: Learn how to value your venture accurately to attract investors. 5) Equity vs. Debt: Know the pros and cons of equity and debt financing. Equity dilutes ownership but might be necessary pre-revenue, while debt increases fixed costs but keeps ownership intact. 6) Investor Persuasion: Convince investors of potential returns. If you can’t show a six to ten times return, investment is unlikely. 7) Risk Management: Address management, market, industry, supply chain, and technology risks to reassure investors. 8) Investment Lifecycle: Understand the stages from seed funding to growth capital and plan your fundraising journey accordingly. 9) Equity Structuring: Learn the art of structuring equity investments to maximize your business’s value while keeping investors happy. Mastering the art of raising financial capital can be the difference between the success and failure of your startup. Dive into Simon Stockley's insights to ensure you are prepared for every step of the journey. Don’t leave your financial future to chance—plan strategically and execute flawlessly. PS. check out 🔔 for a winning pitch deck the template created by Silicon Valley legend, Peter Thiel https://lnkd.in/eXf-XKce

New to startup investing? Learn the basics and benefits of Equity Investment. 🌟Build your dream investment portfolio Here!🌟 ➡️ What is Equity Investment? “Equity is thus defined as a stock, share, or any other security representing a person’s ownership interest in a company. When one owns a company’s share, they are a part owner of the said company”. The simplest way to understand equity is to look at it as a fundraising activity started by a company. Instead of availing an interest-heavy business loan, a company collects money from the general public. People can then buy a partial share of the company as an equity investment. Once shares are purchased, you receive a dividend of the profits earned by the company. ➡️ What are the Equity Options Available? 1.Equity Shares: When a company wishes to have its shares traded in the stock market, it makes an initial public offering (IPO). Equity shares represent a portion of a company’s value that investors or shareholders own. 2.Equity Mutual Funds: Another popular equity investment method is through equity mutual funds (MFs), an investment instrument that pools money from several investors and then invests in a company’s bonds, stocks, securities, etc. ➡️ Benefits of Equity: ✔️ Diversification: Equity allows investors to diversify their portfolios according to asset classes, including stocks, bonds, real estate, etc. ✔️ Liquidity: Liquidity refers to how instantaneously the buying and selling of stocks takes place without impacting the actual stock price. ✔️ Equity tax benefits: Investors are exempt from paying long-term capital gains up to INR 1 lakh earned in a year from selling their equity shares. ✔️ Returns on equity : Equity investors benefit from focusing on investment for at least five to ten years to yield higher returns. ✔️ Dividend income: Equity investors receive dividends from the company’s net profits. Dividend income above INR 5,000 in a financial year is taxable at 10%. ✔️ Bonus shares: A company issues bonus shares to gather more equity funding while rewarding existing shareholders with free additional shares. ✔️ Ownership of equity shares: A company distributes shares to its owners or shareholders against their purchase of shares. ✔️ Equity Loan: Equity investors can keep the shares they hold in their account as collateral to obtain various loans. ✔️ Risk management in equity: Equity investments in stock or mutual funds allow investors to control the risks associated with an investment. ➡️ How to Begin Investing in Equity? Committing to investing money or capital is a significant decision in anyone’s life. Hence, it should be entered into with great thought and planning. The idea behind investing money is to create an additional source of income and generate a sizable amount of wealth for your future that grows over time and appreciates in value. 🌐 Visit: spinvests.com ✉ [email protected] 📞 +91 81001 29292

What is Private Equity? Private Equity (PE) refers to investments made in private companies, or in public companies with the intention of taking them private. PE firms raise capital from investors, such as pension funds, endowments, and family offices, to invest in businesses, often with the goal of eventually selling them for a profit. Key characteristics of Private Equity: 1. Private ownership: PE firms invest in private companies or take public companies private. 2. Long-term focus: PE firms typically hold investments for 3-7 years. 3. Active ownership: PE firms often take an active role in guiding the company's strategy and operations. 4. High-risk, high-reward: PE investments can be risky, but also offer potential for significant returns. Types of Private Equity: 1. Venture Capital (VC): Early-stage investments in startups and growth companies. 2. Growth Capital: Investments in mature companies to fund expansion or acquisitions. 3. Leveraged Buyouts (LBOs): Using debt to finance the acquisition of a company. 4. Distressed Investing: Investing in companies facing financial difficulties. 5. Mezzanine Capital: Providing subordinated debt or preferred equity to companies. Private Equity firms: 1. Raise capital from investors 2. Invest in private companies 3. Work with portfolio companies to improve operations and strategy 4. Exit investments through sale, IPO, or merger Benefits of Private Equity: 1. Access to capital for companies 2. Expertise and guidance from PE firms 3. Flexibility in investment structure and duration 4. Potential for high returns for investors However, Private Equity also involves risks, such as: 1. Illiquidity 2. High risk of default 3. Lack of transparency 4. Dependence on debt In summary, Private Equity involves investments in private companies, often with the goal of eventually selling them for a profit. PE firms raise capital from investors and work closely with portfolio companies to improve operations and strategy. While PE offers potential benefits, it also involves significant risks.

The withdrawal of the angel tax in the 2024 budget is a significant development for startups and corporates seeking to raise private equity. This change paves the way for new funding opportunities beyond traditional banks. Here are some key steps to consider for raising capital: - **Explore Alternative Funding Sources:** Startups can now approach angel investors, venture capitalists, and private equity firms without previous tax implications. This shift can create a more favorable investment environment and attract a wider pool of investors. - **Leverage Debt Funds:** Apart from equity funding, tapping into debt funds can offer capital with terms different from traditional bank loans. These funds may provide more flexible repayment terms and tailored interest rates without the need for property collateral. - **Prepare a Strong Business Plan:** A well-prepared business plan is crucial to attract investors. Highlight your unique value proposition, market potential, financial projections, and growth strategy to showcase your startup's potential. - **Consider Government Initiatives:** Look into government programs like grants, tax incentives, and incubators that support startups. These initiatives can offer additional resources and assistance for your venture. We are a DPIIT empaneled mentor, providing guidance on fundraising strategies and scaling startup challenges. If you're interested in exploring these opportunities further, let's schedule a meeting to discuss how you can benefit from these changes and begin your fundraising journey. Jai Hind.

Are you tired of feeling lost and unsure about your business’s financial future?  😫 A financial model can provide the clarity and direction you need to make informed decisions. Building a financial model can also help forecast your future revenue and expenses as well as identify potential risks and opportunities. And if you are fundraising, a robust financial model can attract investors. Don‘t let financial uncertainty hinder your success. Take control and build a strong foundation for your business. Click here to learn more about financial modeling and how it can benefit your business. 👉 https://bit.ly/3YiNfVv #onecfo #onecfoPH #SMEs #startup #entrepreneurship #fractionalCFO #financialmodeling #datadrivendecisions #fundraising

Unlocking the Path to Finance: Key Insights from the "Meet the Funder" Event Yesterday, I had the privilege of attending the "Meet the Funder" event, organised in partnership with the British Business Bank and Engine Shed. This session was an eye-opener, especially in today's challenging environment where raising investment is tougher than ever, and cash flow is critical for business survival. One of the most striking revelations from the session was the broad spectrum of funding options available to businesses—many of which are often overlooked until it's too late. From grants to equity and debt, there are numerous avenues to explore. Here are some key takeaways: 1️⃣ Grants: Local authorities and Innovate UK offer grants that often require matched funding. 2️⃣ Equity: Engaging with angel investors and venture capitalists. 3️⃣ Debt: Traditional banks and alternative lenders are viable options, though they typically require proof of 2-3 years of profitability. 4️⃣ Asset Finance: Ideal for acquiring machinery or other significant assets. 5️⃣ Invoice Financing: A useful tool to manage cash flow based on outstanding invoices. A standout suggestion was to leverage the British Business Bank's Start Up Loan product, particularly after discussing SEIS and EIS options with potential investors, such as family members. The event featured invaluable insights from prominent figures like Matt Penneycard, Partner at Ada Ventures, and Zara Nanu MBE, a serial entrepreneur and angel investor. Here are some highlights: ✅ Storytelling: Matt emphasized the power of storytelling and building a connection rather than sending out scattergun pitch decks. ✅ Types of VC Funds: Understanding the differences between EIS funds, which have lower return expectations, and institutional VC funds, which aim for high returns and the next unicorn. The opportunity to meet and converse with a diverse group of founders was incredibly enriching. Many were focused on creating innovative apps, particularly in the health and wellbeing sectors. From mental health solutions to apps aimed at reducing vaping, it was fascinating to see the variety of projects underway. Additionally, initiatives like improving young people's access to work experience through tech platforms resonated deeply with me. The session was more than just informative—it was inspiring. It highlighted the importance of getting out there, meeting people, and actively seeking funding opportunities. The personal touch, such as setting up a 60-second Loom video to explain your business, was a particularly creative tip. A big thank you to Edward Tellwright for hosting such a well-received session and making me feel welcome. The founders' willingness to share their journeys provided valuable insights beyond my corporate background. #Finance #Investment #Startups #Entrepreneurship #Funding #VC #AngelInvestors #Networking #BusinessGrowth #Wellbeing #Innovation #BBBLife

A common belief in startup funding is the use of convertible notes and SAFEs. These instruments allow early-stage companies to raise capital without establishing a valuation. Utilizing a convertible note can offer founders a structured debt option that is more familiar to many investors, fostering quicker access to funds. Success is often tied to the ease of negotiation and potential investor interest. However, over-reliance on convertible notes could lead to complicated conversion terms and increasing pressure as the maturity date nears. Founders must be mindful of the debt implications and the need to repay if the company doesn’t achieve certain milestones. On the other side, SAFEs present a simpler, non-debt alternative. Their structure does not impose a maturity date, granting founders flexibility and reducing immediate financial pressure. Investors benefit from potential equity at a discount, should the company perform well. That said, excessive optimism around SAFEs might lead to challenges in securing investment because they lack the familiarity of convertible notes for some investors. A balanced approach could leverage the benefits of both instruments. Startups can use SAFEs for initial funding rounds, ensuring they retain decision-making power while avoiding debt. As the company grows and gains traction, transitioning to convertible notes can cater to more traditional investor expectations. To implement this strategy, begin by establishing clear funding goals. Next, engage in conversations with potential investors about their preferences—some may favor the simplicity of SAFEs, while others might lean towards convertible notes for their familiarity. Lastly, remain transparent about your financial trajectory and milestones to foster confidence in your unique funding approach.

🚀 𝐋𝐞𝐚𝐫𝐧 𝐀𝐛𝐨𝐮𝐭 𝐂𝐨𝐧𝐯𝐞𝐫𝐭𝐢𝐛𝐥𝐞 𝐍𝐨𝐭𝐞𝐬 💵 Convertible notes are immensely popular with early-stage startups and often represent the first form of outside capital injected into a company. But why is that and how do they work? Let's break it down. ➡️ 𝐖𝐡𝐚𝐭 𝐀𝐫𝐞 𝐂𝐨𝐧𝐯𝐞𝐫𝐭𝐢𝐛𝐥𝐞 𝐍𝐨𝐭𝐞𝐬? Think of them as traditional loans: someone lends you money, and you accrue interest. However, the key difference is the intention to convert this debt into equity. ➡️ 𝐖𝐡𝐲 𝐂𝐨𝐧𝐯𝐞𝐫𝐭 𝐃𝐞𝐛𝐭 𝐓𝐨 𝐄𝐪𝐮𝐢𝐭𝐲? Consider this: debt is capped—you know exactly how much you'll get back. While that's reliable, equity is uncapped and can be far more lucrative if the startup succeeds. If you believe in the company's potential, this difference can be substantial. ➡️ 𝐖𝐡𝐲 𝐍𝐨𝐭 𝐈𝐧𝐯𝐞𝐬𝐭 𝐈𝐧 𝐄𝐪𝐮𝐢𝐭𝐲 𝐅𝐫𝐨𝐦 𝐓𝐡𝐞 𝐒𝐭𝐚𝐫𝐭? It's all about valuation. Early-stage startups often struggle to pin down a precise valuation. Convertible notes offer a way to postpone this issue until a significant equity financing round, where a clearer valuation can be established. ➡️ 𝐇𝐨𝐰 𝐃𝐨 𝐂𝐨𝐧𝐯𝐞𝐫𝐭𝐢𝐛𝐥𝐞 𝐍𝐨𝐭𝐞𝐬 𝐖𝐨𝐫𝐤? At a basic level, instead of repaying with money, you repay with equity. But there are nuances: - ♻️ 𝐂𝐨𝐧𝐯𝐞𝐫𝐬𝐢𝐨𝐧 𝐮𝐩𝐨𝐧 𝐐𝐮𝐚𝐥𝐢𝐟𝐲𝐢𝐧𝐠 𝐄𝐯𝐞𝐧𝐭𝐬: This typically happens during a financing round exceeding a specified amount. - 🤑 𝐏𝐫𝐞𝐟𝐞𝐫𝐞𝐧𝐭𝐢𝐚𝐥 𝐓𝐞𝐫𝐦𝐬 𝐅𝐨𝐫 𝐍𝐨𝐭𝐞 𝐇𝐨𝐥𝐝𝐞𝐫𝐬: Early investors bear substantial risk, so they are rewarded with either a capped lower valuation or a discount on share prices upon conversion. They can choose the more advantageous option when the time comes. ➡️ 𝐏𝐮𝐭𝐭𝐢𝐧𝐠 𝐈𝐭 𝐀𝐥𝐥 𝐓𝐨𝐠𝐞𝐭𝐡𝐞𝐫 A convertible note starts as a loan accruing interest with the intention to convert to equity during a qualifying event, giving investors favorable rates for their initial risk. That's my take on convertible notes 👆 What would you add? Let us know by joining the conversation in the comments below 👇 *** Looking to improve your finances? Check out 𝐬𝐭𝐚𝐬𝐡𝐛𝐨𝐨𝐤𝐤𝐞𝐞𝐩𝐢𝐧𝐠.𝐜𝐨𝐦 for professional bookkeeping and accounting help. Get started with a 𝐅𝐫𝐞𝐞 𝐂𝐨𝐧𝐬𝐮𝐥𝐭𝐚𝐭𝐢𝐨𝐧 𝐓𝐨𝐝𝐚𝐲! *** Did you enjoy this content? Here's how you can show your appreciation: 👍 Give this post a thumbs up 💬 Leave a thoughtful comment below - I respond to each one ➕ Follow me for more Finance & Accounting Tips 🔔 Hit the bell icon on my profile to be notified of future posts like these . . . . . . . . #yourcfoguy #finance #startups #accountingandaccountants #stashbookkeeping #bookkeeping #accounting #BookkeepingTips #BookkeepingServices #smallbusiness #payroll #remotebookkeeping