Private equity refers to investment in companies that are not listed on the stock exchange. Venture Capital (VC) is a branch of Private Equity that finances start-ups in their launch or rapid growth phase. Private Equity in the broadest sense is involved at various stages, including in more mature companies via buy-outs (LBOs) or growth financing.

Private equity funding is appropriate when the company has a proven business model, significant traction, and a need for capital to accelerate growth, finance expansion or structure its organization. Scale-ups often seek private equity to take them to the next level (internationalisation, acquisition).

Venture Capital (VC): Financing start-ups at seed and growth stages.
Growth Equity: Investment in companies that are already profitable but expanding rapidly.
LBO (Leveraged Buyout): Purchase of companies, often using leverage (debt).
Family Offices: Investments by wealthy families, often flexible and long-term.

A Business Angel is an individual investor who puts up their own money, often at an early stage. A private equity fund manages capital from institutional and other investors, with more structured processes and larger amounts.

Market: Size and growth potential.
Team: Experience and complementarity of founders.
Traction: Sales, growth, customer retention.
Business model: Profitability, scalability.
Exit strategy: Prospects for resale or IPO.

Your company is ready if it has a proven product or service, growing revenues, a clear need for financing and a solid strategic vision. Sound financial indicators and a clear business plan are essential.

On average, raising funds takes between 4 and 9 months. This includes preparing documents, finding investors, negotiating terms and due diligence.

You need a clear pitch deck, a detailed business plan, solid financial data, and an ambitious but realistic vision of growth. A well-organized data room with key documents makes the process easier.

Pitch deck
Business plan
Financial data (P&L, cash flow, balance sheet)
Cap table (capital breakdown)
Contracts and key legal information

This depends on the amount raised and the valuation of the company. In general, the founders sell between 10% and 40% of the capital per financing round. (Around 20-25% is reasonable).

Valuation is based on several methods: revenue multiples, market comparables, and discounted cash flow (DCF). It is often negotiated with the investor.

Equity : Sale of a share of the capital.
Convertible debt: Loan that can be converted into shares.
Mezzanine: Hybrid financing between debt and equity.

This is a document governing relations between shareholders. Key clauses: pre-emption right, anti-dilution clause, drag-along, tag-along. (see glossary)

Investors can request a seat on the board of directors, veto rights on certain strategic decisions, and regular reporting.

Earn-out: Deferred payment based on future objectives.
Ratchet: Valuation adjustment mechanism based on future performance.

✅ Access to capital, strategic support, and credibility.
❌ Loss of control, capital dilution, pressure on profitability.

Look at the alignment with your vision, sector experience, amounts invested, and support conditions.

Regular reporting, meeting targets, financial transparency.

Generally 4 to 7 years, before exit via resale or IPO.

Raise funds at the right time, negotiate a good deal, favour instruments such as convertible debt.

There are several ways of exiting a private equity fund:
– Purchase by another investor or a larger fund (secondary buyout)
– Resale to an industrial or strategic player (M&A)
– Initial public offering (IPO) to enable investors to sell their shares gradually
– Repurchase of shares by the founders if they wish to regain full control
– The choice of exit method depends on the economic context, the company’s performance and investors’ expectations.

If the company fails to meet the targets set at the time of raising the funds, there are several possible scenarios:
– Renegotiation of the terms of the investment (adjustment of the business plan, postponement of deadlines).
– New fund-raising to refinance the business and adjust the strategy.
– Dilution of the founders if the investor applies a ratchet clause (capital adjustment based on performance).
– Change of governance: the investor may require adjustments to the management team.
– Forced sale or restructuring in critical situations
Everything depends on the contractual clauses signed with the investors and the level of dialogue between the stakeholders.

This depends on the clauses contained in the shareholders’ agreement.
– A drag-along clause may allow the majority investor to force a sale if an attractive opportunity arises.
– In the event of poor performance, a fund may force a sale because of its obligations to its investors (Limited Partners).
– Some funds insist on preferential liquidation clauses, which may force a sale to recover their investment.
Negotiating these points before exercise is essential to avoid ending up in a forced sale situation.

If fund-raising fails, the company must explore other options:
– Optimise its business model to improve profitability without external financing.
– Seek alternative financing: bank loans, subsidies, crowdfunding, corporate venture.
– Re-evaluate its strategy: cut costs, and refocus on the most profitable segments.
– Improve traction and attractiveness before trying again with other investors.
Failure can be temporary if the company adjusts its approach and comes back with a stronger case.

– Maintain strong, controlled growth: investors are looking for companies capable of scaling up quickly.
– Structure solid governance: anticipate the requirements of a potential IPO.
– Optimise financial management: clear accounts and a positive EBITDA facilitate access to investors.
– Diversify revenue streams: to reassure investors of the stability of the business model.
– Avoid excessive dilution in the initial rounds: to maintain room for manoeuvre in the event of new financing.

In general, the fund-raising itself is not taxable, but there are several factors to bear in mind:
– Capital gains tax on the resale of founders’ shares.
– Tax treatment of BSPCEs, stock options, and free shares (possible optimization depending on the country).
– Taxation of dividends if distributions are planned.
– Taxation of foreign investors if the fund is based outside the country in which it is established.
Optimized tax structuring from the outset helps to avoid unpleasant surprises.

– Pre- and post-money valuation: clear definition to avoid any ambiguity.
– Liquidation preference: redemption order in the event of sale or liquidation.
– Anti-dilution clause: mechanisms protecting investors against a fall in valuation.
– Governance and investors’ rights: seats on the board, right of veto on certain decisions.
– Exit strategy: exit arrangements for investors.
These clauses should be negotiated with a lawyer specialising in private equity.

– Limit excessive dilution: by raising just enough capital and negotiating the valuation.
– Negotiate the shareholders’ agreement carefully: avoid overly restrictive clauses.
– Maintain a good balance on the Board of Directors: avoid giving investors a majority of seats.
– Favour hybrid financing (convertible debt, mezzanine) to avoid an immediate sale of shares.
The assistance of a legal and financial expert is recommended to structure the operation securely.

Accordion content – Loss of control if investors take too large a stake.
– Conflicts between shareholders over vision or management.
– Excessive dependence on a single investor.
– Unfair clauses: preferential liquidation unfavorable to founders, restrictions on management.
– Personal liability of directors in the event of guarantees given to investors.
A prior legal audit and rigorous negotiation can minimise these risks.

– Domicile the company in a tax-friendly country without compromising its credibility.
– Use optimised financial instruments: convertible bonds, and preference shares.
– Set up a profit-sharing scheme (BSPCE, stock options, free shares) to motivate the team while optimizing tax treatment.
– Anticipate the taxation of foreign investors to avoid excessive withholding taxes.
Tax planning upstream, with specialized experts, helps to optimize the levy and avoid unnecessary charges.