Equity is by far the most patient long-term type of financing and the one that must be available in any capital structure. Companies typically requires equity financing to grow their business, to strengthen their balance sheet through recapitalization, divest some of their equity shareholding or a combination of all those reasons.
Equity Finance is typically classified according to the market supplying the capital:
- Private Market – known as private placement, typically with limited pool of participants and size of investment ticket. Private placements provide businesses with the luxury of selecting the right partner who fits the nature, need and stage of company’s life cycle from, like strategic investors, financial investors, angel investors, venture and private equity funds. Private market provides flexibility and customization in investment terms and conditions that are typically not applicable in the public markets.
- Public Market – in which companies list their shares for trading in a stock market through an IPO. Public markets provide companies with access to a large pool of potential investors as well as the ability to raise large investment ticket sizes. It also provides the advantage of repeating rounds of equity financing through rights issues. Building a strong governance is another advantage of public markets and it is especially attractive to family-owned companies striving for maintaining the businesses for next generations.
Our Equity Finance Strategy is designed to raise for the most efficient equity funding source that optimally fits the need of our business partners, specially those with businesses that have direct and quantifiable positive impact on the local economy.
