Entrepreneur view

We have already discussed the ideal profile of an entrepreneur for private equity investors. Now we turn to the selection process. The entrepreneur must draw up a business plan that demonstrates the strength of his or her company.
The investors must be convinced that the company is well managed, but at the same time, the business plan must explain where the growth is situated and how many resources are needed for this (the so-called use of proceeds). Part of these needs can be financed by venture capitalists.

Investor view

During the analysis of the business plan by the investors, three aspects are of paramount importance: in addition to the commercial and financial criteria, the proper management is also considered.
Every analysis of a business plan begins with the acid test of the product or services that the company puts on the market. What is unique about it, why do customers buy on a recurring basis?
Is the market relevant or growing?
Is the business model, with its cost structure, capable of generating profits on a recurring basis?
When examining a business plan from a financial point of view, the proposed entry price, the so-called “PreMoney”, is of paramount importance. There are libraries full of methods for valuing a company. An unfounded, i.e. too high, entry price also reduces the chances of obtaining the right return later on. In other words, the new investors will not achieve their intended return; the so-called Internal Rate of Return or IRR.
Finally, investors attach importance to the sustainable management of the company, both in terms of internal policy and with its stakeholders.

At TheClubDeal

At TheClubDeal we attach great importance to the impact of the company in a local competitive environment, which means local and sustainable job creation. And of course the company should cherish a positive contribution to the environment.
Good governance is the last selection criterion, but it lies at the heart of TheClubDeal.
The entrepreneur must be willing to grant the new investors good governance, supervision and reporting rights. This seems obvious, but if it is the first time that the shareholder structure is opened up to a third and therefore new investor, it is logical that the rules of the game are adjusted and conflicts of interest are proactively avoided.
How that shapes the managerial debate culture is reflected in the subsequent shareholder agreement.