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The stages in a company's lifecycle often dictate different capital
structures. Private equity sponsorship can be a powerful and flexible
source of capital for growing companies who are not yet ready to
go public, for public companies that the public markets have neglected
or undervalued, or for owners of private companies that would like
to diversify and partner to maximize their long-term value.
Young, entrepreneurial companies often are not big enough or do
not have enough operating history to raise public equity. In these
situations, a private equity sponsor can provide capital, help a
company build a strong business foundation, and ultimately guide
it to a public offering.
Conversely, when the public markets lose interest in certain public
companies, private equity can be a source of growth capital, it
can serve as an endorsement in the public markets, or it can be
a means of taking the company private–allowing management
to focus on operations and implementing the firm's long-term growth
plan.
Entrepreneurs who have built successful companies often eventually
reach a point where they face a tough decision–sell their
business to generate liquidity or stay with the business to capitalize
on the opportunity that remains ahead. Partnership with a private
equity sponsor enables a business owner to capture the best of both
of these options–liquidity along with a continuing ownership
interest and a partner that can help maximize the value of this
remaining stake.
Ultimately, a private equity sponsor like FFL allows companies to
follow a financial path that doesn't revolve around quarterly earnings
reports, but instead is based upon creating long-term shareholder
value. We like to back long-term development plans, and as experienced
private investors we can spend the time to understand all parts
of the business plan in depth, unlike most public investors who
can only learn about the parts of the plan that the company is willing
to share publicly.
By partnering with a private equity sponsor like FFL, a company
gains a powerful and committed partner and sounding board that will
actively work with them to accelerate toward company goals and create
value.
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