Private Investors – what they really wants?

Private Investors – what they really wants?

Huge Returns on Investments

At the risk of stating the obvious, investors will want to make a profit out of their investment. This means that, at a minimum, they will want to see the value of their investment double over, say, three years. People don’t invest in small companies to lend a helping hand. They invest to make money. And they expect to make a lot of money. If they expected to make just a 10 percent or even 15% return on their investment they would invest in a largely less risky major public listed corporation. Instead they invest in small companies because they expect to get huge returns on their investments.

Clear Exit Strategy

They will want to see an exit route – no-one wants to be locked into an unquoted investment for ever, so there needs to be a clear exit strategy. This can be through an outright sale, or sale back to the management if cash flow permits.

A Seat on the Board

They will want a seat on the Board; possibly they will want to fill a part time role in the business. Indeed, they are likely to have a range of skills and contacts that will be extremely useful to a company.

Investors invest in people first, businesses second, so they need to be able to buy in to the proposal and to trust the management team.

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