Being well-positioned even during economic downturns, PE acts as a stable and long-term solid partner to their portfolio companies and can help them with necessary strategic decisions or capital investments.
But how does the largest private equity fund in the Baltics look for suitable companies, what to do to get noticed by PE investors, and in which ways does BaltCap help companies grow? A seasoned PE expert with over 20 years of experience, BaltCap’s partner Sandijs Āboliņš-Ābols helps to find answers to these questions.
1. Which companies are the best fit for PE financing, and how can a company better prepare for financing?
Private equity is for companies with ambition and the desire to grow. Private equity money fits those situations where traditional financing sources, such as owner equity or a bank loan, are unavailable. If a company is in crisis and running out of funds and looking to raise those funds, then most of the time we will not be able to help. However, if the company wants to enter new markets or expand, we are here to support it.
Regarding preparation, the company’s management or owners must first know what they want to achieve. There must be a vision and preferably a concrete growth plan for how to achieve it. Second, a company’s shareholders must be ready for a new co-owner to enter the business. We are not a bank, we do not lend money, we become co-owners. Thirdly, the company needs to have complete and transparent finances.
2. How do BaltCap companies grow?
We have the advantage of 20+ years of experience. BaltCap has invested in more than 100 companies at various stages of development in Baltics and beyond. We are experienced in dealing with many different situations, both in start-ups and large-scale companies. Our team has the capabilities to help as we know the paradigms to help companies grow and overcome challenges. For a company, collaboration with BaltCap marks the transition to its next development phase. We can quickly tell you what needs to be done to take your company to the next level.
“For a company, collaboration with BaltCap marks the transition to the next phase of development.”
3. What is hindering business growth for Baltic companies?
Without the ambition to grow, the next step cannot be taken. There is a difference between having the aspiration to be the biggest in your city versus becoming leading in the Baltics and beyond. Often founders find it difficult to let go of their company and expand the ownership structure. However, for the ones who embark on this route, taking the next step means broadening the management team, delegating responsibilities, and increasing the knowledge of running a larger, but those steps must be and are worth taking if you want your company to reach the next level of development.