Originally published by The Deal Online
As difficult economic times continue, it is no surprise that private equity and venture capital firms are seeing many of their portfolio companies struggle. Some of these businesses need or likely will need additional cash infusions to meet near-term expenses. With banks still reluctant to lend, the portfolio company might have nowhere else to turn but to its current PE or VC owners. The PE/VC owners -- not wanting to lose their existing investment and perhaps believing that the company can, with only a modest infusion of cash, get past its current problems and achieve long-term growth and prosperity -- might be willing to front the company some needed cash.
The terms of any such loan the PE/VC owners might be willing to make in this type of situation will of course vary widely depending on the circumstances....
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