Family matters | KPMG | SA

Family matters

Family matters

Financing family business growth through individual investors

Financing family business growth through individual investors

Foreword

Family businesses, like other companies, are often in search of financing to propel growth. As a family grows and changes, the family business must also evolve to accommodate changing family dynamics. The future of the family members, maintaining the independent nature of the family business and the preservation of family unity depend on the growth of the family business and its capacity to generate sufficient profit to all its members.

But access to capital in a post-global-financial-crisis environment is not easy. A key differentiator between family businesses and other companies is the fact that the former tend to view maintaining control over their company as key to success, which can limit their financing options even further.

Some family businesses look to private equity or corporate strategic partners, but such financing options limit or reduce control for the family business owner. Hence the value of and opportunity presented by High Net Worth Individuals (HNWIs), investors that are generally willing to accept a minority stake in a business.

Our report Family matters: Financing Family Business growth through individual investors examines the various possible sources of funding for family business, and then explores in detail the synergies between HNWIs and family business. We have found that family businesses and HNWIs can make excellent business partners, and our survey provides justification for this opinion as well as practical insights that can be used by both parties to forge long-lasting and productive relationships.

We hope the report sparks discussion, and we welcome your feedback.

Connect with us

KPMG Enterprise