FOR THE PAST TWO YEARS, Inc.The list of founder-friendly private equity firms shed light on private equity firms supporting founder-led businesses through both good times and, well, global pandemics. This year, we had an epiphany when compiling the list: Private equity firms don’t have a monopoly on being founder-friendly. Venture capitalists are people too.
The good news: whether your business is looking for venture capital or private equity, there’s no shortage of dollars. In the first half of 2021, venture capital fundraising in the United States reached $66 billion in commitments, setting a record for capital raised in the first two quarters of a year, according to the company. Refinitiv financial data. Private equity fundraising reached $218 billion in commitments, the highest figure in a decade. Surprisingly, there may never have been a better time for business owners in need of investment capital.
Of course, the only money that comes with no strings attached is the money you find on the couch. Accept the private equity and the conversation inevitably turns to the question of whether you should remain CEO after the investment. “Growing your business from $0 million to $10 million might be something that only you could have done, but helping your business grow from $10 million to $100 million is not something you have the skills to do. needed and you need help,” says David Snow, co-founder of Privcap Media, a creative agency for private equity firms and #4,571 on the 2021 Inc. 5000 list. “It should be a conversation honesty that takes place at the start of negotiations.” A frank conversation, that is, between your investors, your company and you.
Inc.The list of Founder-Friendly Investors includes companies identified by our editors or submitted to us through an application process. To confirm these companies’ commitment to investing in entrepreneur-led businesses, we collect data on the growth of companies in their portfolio and extensively interview entrepreneurs, including those who have exited, about their experiences with businesses. Based on this, we produce a proprietary score that determines the private equity, growth equity and venture capital firms whose missions most significantly support startups and the men and women who founded them.
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Excerpt from the October 2021 issue of Inc. Magazine