Factores que inciden en el rendimiento escolar

The typical fundraising activity steps are as follows:

1.  Business Idea Creation 2.  Job Selling

3.  Raising Debt 4.  Closing

Of course, depending on the country and on legal framework, these activities can be partially or totally driven by law.

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1. Business Idea Creation

Business idea creation is aimed at producing an information memorandum to be promoted in the market.

Before an information memorandum is produced “testing the waters” occurs. This phase is carried on in a very informal way among the professional network of the PE firm to assess, for instance, whether it makes sense for PE investors to invest in a specific cluster of PE or not.

After the managers have received an informal consensus about their activity, a more formal part begins and the information memorandum is produced.

The information memorandum has to explain the rationale of the business idea to the business community (and to the supervisors, in case the fundraising occurs in Europe) and has to appeal to the potential audience of investors.

The success of the involvement of an investor into the business idea is strictly linked to the reputation and to the track record of the promoter.

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Business Idea Generation Job Selling Raising Debt Closing

1. Business Idea Creation II

The typical content of an information memorandum is as follows:

•  Choice of the vehicle

•  Target to invest (countries, sectors, life cycle stages)

•  Size of the vehicle and minimum amount at which the fund will be closed

•  Corporate governance rules (i.e. relationship between promoters-managers and investors)

•  Size and policy of investments

•  Internal code of activity / LPA

•  Track record of the promoters-managers

•  Usage and size of leverage (in the case of a non-European fund)

•  Costs

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Business Idea Generation Job Selling Raising Debt Closing

1. Business Idea Creation III

When this step comes to an end, there are two options depending on the countries in which a PE firm operates.

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If the PE firm operates in Europe, the PE must

obtain the formal approval from the

Supervisor and afterwards, the

information memorandum is transformed into an

In the US and in the UK, the PE firm does not have

to obtain any approval, rather the information

memorandum can be transformed in the LPA

since it is a contract.

Business Idea Generation Job Selling Raising Debt Closing

2. Job Selling

Job selling is the phase in which the managers have to convince the investors not only to give an opinion about the idea, but also to invest in that idea. This is

actualized by the letter of commitment with which the investors declare how they want to participate in the fund.

This phase often occurs via one-to-one meetings between the promoters and the potential counterparts (may it be an insurance company, a bank or a high net worth individual). In some other cases, this phase may be organized in a kind of meeting, in which more than one investor is involved.

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Business Idea Generation Job Selling Raising Debt Closing

3. Debt Raising

Debt raising is job selling too, but with a different perspective in which the goal is to sell a project to a community of financers.

Debt raising is strongly related to the reputation both of the promoter and of the investors (good signaling effect). In fact this step is difficult for each counterpart (the investors and the banks) because no one wants to make the first move.

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This phase only occurs if the fund is based either in the UK or in the US.

Business Idea Generation Job Selling Raising Debt Closing

4. Closing

After all the steps are concluded, whether the fund is located in the English-speaking countries or in Europe, the closing phase starts.

The closing phase can be meant in two ways:

§  A “successful” closing occurs when the PE firm is able to collect all the money necessary to begin the PE activity and this was possible thanks both to the reputation and to the purpose of the initiative

§  A “pure” closing occurs when the PE firm is not able to collect the whole money in the fundraising phase. Such is the case when the managers do not have a very robust network.

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Business Idea Generation Job Selling Raising Debt Closing

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1.  The Managerial Process for Equity Funds 2.  Fundraising

3.  Investing: The Decision Making Phase

4.  Investing: The Deal Making Phase

5.  Managing and Monitoring: Supporting the Company 6.  Managing and Monitoring: Covenants Usage

7.  Exiting

8.  Private Equity Advice for Entrepreneurs – Interview with Fabio Sattin

Content

Introduction

This clip and the following focuses on another step of the managerial process: The investing phase.

After the money has been collected by the PE firm, the phase of investing activity can start.

The investing activity is the core of private equity business and it is the main way to develop the business idea for the managers on the investors’ behalf.

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Investing

Investing is a very broad definition, in which we can distinguish two different important moments:

1.  Decision-Making: the activity of valuation and selection in which the PE has to assess whether the investing activity makes sense.

2.  Deal-Making: the activity of negotiation of the contracts by which the PE firm can invest and actively participate in the company. These contracts include, for instance, the calculation of the shares the investor has to buy, the corporate governance rules…

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