Your side hustle is bringing in money. You can’t stop thinking about expanding it to accommodate your growing clientele. With the banks, you still have some loans you trying to pay up. As for families and friends, you have used them enough. Your savings are you’re for keeps, you don’t want to touch it. It’s bad business to use up your savings and eat all the profits. You are not the type that quits, cause you know there is always a way out. Here is where you consider private placement. You sell some of your shares to a relatively small number of chosen private investors as a way of raising capital. It is cost effective and very convenient. Your potential investors are large banks, mutual funds, insurance companies and pension funds. All you have to do is approach them. They are financial institutions and money is not a problem to them. Whats in it for you?
1.A definite source of capital for risky ventures.
Do you know what investors love? Bold and daring entrepreneurs, cause through them, they make double returns without necessarily extorting you. It’s a tough world, only the toughest make it through. No bank wants to experience high default thanks to you, the risky borrower. But when your business looks promising, some mutual funds will pick you up and make your dreams come true.
2. Maintain private status.
Private placement makes you choose. This implies that your books of accounts and you every day move is not under tight scrutiny by the government system. What you take home is between you and your partners. Like they say too many cooks spoil the broth. The fewer you are the better.
The hustle of looking for a broker to get you a good investor, the cost of paying underwrites so they can price your shares can really eat a big chunk of your hard earned money away. With private placement, it’s less complicated. That means your time and resources.
4. You have the right and opportunity to hand pick investors with compatible goals and interest. You know birds of the same feathers flock together. This could be a great chance for you to push beyond the limits of the spirit of unity is a strength so as to achieve your financial goals.
5. Rolling with sophisticated business people will give you a lifetime experience that you will practice to your grave. It’s like learning from the crème de la crème in that field. With time you learn a few tricks in the game. Become a better manager and embrace technology like you cant do without it.
6. The company’s structure will change too to a better one. You will experience growth over a short period of time in terms of financial resources and structure, than if you were all by yourself.