Following on from part one – where Russell explained how he and his team grew the S-Three Group from a tiny start up to an international brand with thousands of employees – Russell returns to discuss the role private equity can play in growing a business.
He also offers valuable advice for business leaders wondering how to choose the perfect private equity house for their own business, and explains what steps need to be taken to prepare effectively.
You can listen to the interview or download it below:
Here are some of the questions Kenny asks Russell:
00.36 – What is private equity?
‘Private equity is a great way for companies to find funds to grow but also a very good training ground, I think, for companies that have an aspiration to become public.'
04:20 – What kind of preparations do you need to make?
“Well I think the first thing is, you've got to be a company worth investing in. Now that might be because you're underperforming and they think they can change that. More positively, they've got to look at it from the prospective that if they put money in they'll get a good return on it.”
06:54 – Do private equity companies require security like the banks do?
10:04 – If you are in a business turnaround situation, do you need to be careful when it comes to private equity companies?
‘There's also genuinely supportive private equity companies that have made a massive difference to the success of some of the biggest companies in the world. That early support is sometimes needed, for example the guy who founded Hotmail had a very sympathetic private equity backer and went on to make a lot of money when he sold it to Microsoft.'
12:15 – How was your experience with private equity?
14:10 – What costs are associated with private equity?
15:55 – How do the private equity firms raise the capital to do this?
17:43 – Didn't Man Utd and the Glazers do something like this?
18:50 – What happens with this extra money that comes into the business? Can the managers benefit from it?
20:25 – What are your thoughts on the new model of crowd funding?
21:38 – With private equity and angel investors do you get more than you would from a bank in terms of advice and experience?
22:45 – Is there any advice you can give on how to choose the right private equity house or angel investor?