If you have recently come into a large sum of money and you want to make your money grow, private equity is a good way to accomplish that. You can provide capital to floundering business owners or buy out dying businesses and help them regain their foothold so they can turn a profit for you. However, seeing that you are new to investing, and definitely new to this type of investment, should you attempt to do this on your own? Or should you hire a business broker to help you invest your newly-acquired lump of loot? Here is some advice to get you started.
Learning the Ropes
Walking into private equity blind (i.e. having no experience) is tricky at best and wealth depleting at worst. When you first start out investing in private equity ventures, you absolutely want to have a business broker working for you. He or she can show you the ropes with regards to what looks like a good investment and is not versus what looks like a good investment and definitely has the capacity to become an even better investment choice. Once you can spot which individual business owners and which faltering companies would and could produce a return on your investment, then you may consider ending your business relationship with the broker and looking for your own investment projects elsewhere.
You could also take a course on investing, the kind that many brokers have taken and continue to take. Some of these courses cover investing broadly, which may be very useful if you want to create a vast portfolio of investment options. Others focus on one type of investment rather intently, and given that private equity is becoming such a popular investment option with people who have the money to do it, you may want to just take a course on this particular topic right now and come back to other investment classes and topics later.
Going It Alone
Trying to do private equity investing on your own could yield some devastating results. You might not know where to look for investment leads, or you might be inundated by requests to fund and support business owners and businesses. As such, you may make several mistakes before finally investing in something that really turns a decent profit for you. However, "going it alone" with this type of investing will, most assuredly, teach you how to invest and how to spot the potentially good investment decisions as well as the bad. It will harden you and prepare you for a lifetime of investing, something which a broker and/or an investing class cannot teach you.