The private funding Australia industry has grown rapidly over the past few years. It is now one of the most popular methods for raising capital, and private investors are starting to pour money into private companies left and right. This article will discuss 3 things that you should know about private funding in Australia before you start looking for private investors.
1) Private Funding Is Growing Rapidly:
The private funding industry is growing rapidly. In 2014, private investors spent more than $52 billion on private companies around the world and this number is only expected to grow in the future.
In Australia alone, private funding has grown by 300% over the past decade!
It’s clear that private investment works very well for many different businesses and startups looking for capital.
The private funding industry is still growing at a rapid pace (300%). Over $52 billion was invested into private companies worldwide in 2014 and it’s estimated that an additional 400% will be put towards these ventures within five years.
2) The Cost Of Capital Can Be Much Lower Than Traditional Methods:
Traditional private investments may have a higher cost of capital than other investment methods.
With private funding Australia, the cost of capital is much lower due to things like limited partners and standardized financing terms that are usually pre-negotiated by both parties. These factors make it easier for private funds to get more favorable rates on their debt or equity instruments because they can be used across multiple deals with different types of investors.
This makes private investment considerably cheaper when compared to traditional sources such as banks or VCs which demand better borrowing terms in exchange for putting money into your company.
Because private investors usually have a much smaller pool of capital compared to banks or traditional venture capitalists, they are going to be far more selective about the deals that they invest in.
3) You Do Not Have To Share Your Company’s Valuable Information With Private Investors:
Some private investors are more demanding than others.
For example, some private equity funds have a policy of acquiring large chunks of your company’s shares in order to control the decision-making process within your business.
This can be incredibly advantageous for you because it means that private capital is being invested without having to worry about losing significant amounts of autonomy over how you run your own business! However, this comes with its own risks too – private investors may also demand high levels of transparency over all aspects of your business operations which can often result in sensitive information being leaked into the public domain before any sort-term decisions or strategies have had time to play out fully.
In conclusion, investing with private funds offers several advantages over other sources such as bank loans or VCs which can include cheaper rates on debt/equity instruments faster deal closure due diligence done prior to closing making sure you’re working with financially strong private investors who have a vested interested in your business’ success.
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