1.3. The Map of Equity Investment: An Entrepreneur’s Perspective
Development of the private equity and venture capital industry starts when the entrepreneur realizes he needs to be funded by external investors to support the expansion or the transformation of his firm. Therefore, equity investment provides a firm’s specific financial needs or the finances to create a firm.
Firms need funding during sales development, which occurs during different stages for each firm. The drivers that measure the firm’s need for funding are investment, profitability, cash flow, and sales growth. These four variables are strictly linked together, and should be evaluated from a long-term perspective. These four variables/drivers represent the stage the firm is ...
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