Equity Investments actually helps the project entrepreneur to raise funds to obtain leverage senior debt funding, the professional language called Mezzanine funding, to the Mezzanine/Equity investments considered high-risk investment there is no collateral or Second collateral level or plagued the shareholders of the project company. Nevertheless, good chances of getting high yield.
Mezzanine/Equity investments were born due to the fact the business/entrepreneurs to raise the necessary equity to obtain adequacy capital/credit facility/project funding from the bank or financial institution senior debt.
After the entrepreneur submits his project to the bank or any other financial institution as part of the processing of Risk management and due diligence on the entrepreneur, project, team, etc, by the bank required policy, the entrepreneur equity deposit which usually ranges from 20% to 50%, to obtain adequacy capital for the project, sometimes the bank agrees to take collateral such as land as part of the equity, In this situation, the project may stuck, therefore the entrepreneur must find alternative sourced of equity funding.
One of the ways is to raise capital from investors. Another way is to approach a Debt companies, Private Equity companies, Family Offices, VC Fund to raise the necessary capital for the equity required by the bank. Moreover, the entrepreneur will pay a significant portion of the profits as equity partners or high interest, while the equity investors in most cases will see the principal invested and the profits back only at the end of the project, and the distribution of the funds will be according to the actual project results.
However, investors or debt companies will back themselves up with collateral, such as a second lien, financial guarantees, assets, the project company shareholders liens, in addition also require a seat on the project board. The high yields practices in this business field allow for a very wide range, a high level of confidence, and reasonable risk.
Alternative Investments market volume in recent years has increased worldwide and usually managed by Asset Management, Debt companies, Private Equity companies, Family Offices, Hedge Funds, VC Funds, Mutual companies. Each company hedges and structured different way activities from the experience, specializing in a range of knowledge and understanding of the required security mechanisms.
You have decided to become an alternative investor, greet, now it is important to make sure, the professionalism of the company, the way the company makes due diligence, who the law firm, who is the bonds trustee, who is the escrow/trust agent, license and insurance of the trustee, Portfolio report by an external CPA.
Today, in the Internet era, you can ask Dr. Google, easily get an idea about the company’s operations.
Remember, it is a privilege to receive an invitation to participate in our Alternative Investment, not mandatory, we allow investors to participate and join our Alternative Investment programs, this action is not suitable for every investor. Alongside this, the nature of the activity is solid and allows great confidence and security for investors.