Investing in a company which is not a PLC?

tmwild
tmwild Posts: 9 Forumite
in Savings & investments
Is there any way?

I've just read Peter Lynch's book One Up On Wall Street and he advocates looking for companies in your local area which have potential to grow rapidly. I've found a restaurant chain that I'd love a share of but its not a public company. I suppose this is often a problem with small businesses?

The company is a Limited company but have just received £6m investment from a private equity LLC - is there any sensible way to invest either in the restaurant through the LLC or in the LLC itself?

Or is it just the case that you have to hope a company goes public and wait for the IPO before you can invest?

Thanks,
Tom

Comments

  • Freecall
    Freecall Posts: 1,306 Forumite
    First Anniversary Combo Breaker First Post
    Subject to any shareholder agreement which may be in place, it's a free world.

    If one of the existing shareholders wants to sell you their shares then they are free to do so at whatever price you jointly agree.
  • tmwild
    tmwild Posts: 9 Forumite
    How would I go about doing that? Contact the LLC?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Name Dropper Photogenic First Anniversary First Post
    Business Angels have been sources of finance for many years. Besides the capital what else would you bring to the table? As capital alone is not always the issue.
  • alanq
    alanq Posts: 4,216 Forumite
    Combo Breaker First Post
    edited 25 May 2015 at 9:30PM
    While you are considering how to buy into a company you might also wish to consider how you would get your money out again when the time comes. Will there be anyone who wishes to buy your stake?
  • Biggles
    Biggles Posts: 8,209 Forumite
    Combo Breaker First Post
    alanq wrote: »
    While you are considering how to buy into a company you might also wish to consider how you would get your money out again when the time comes. Will there be anyone who wishes to buy your stake?
    This is the Big Question. Something is really only an investment if you are clear that you will be able to realise your profit when the time comes. Otherwise it's a charity donation.
  • jimjames
    jimjames Posts: 17,592 Forumite
    Photogenic Name Dropper First Anniversary First Post
    tmwild wrote: »
    How would I go about doing that? Contact the LLC?

    Do you already have a substantial portfolio of funds and shares?

    If so then it may be appropriate to have some unlisted exposure but there are far easier ways to do so that trying to buy shares in the way you have described and ways that mean you can get your money back if needed.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • eskbanker
    eskbanker Posts: 30,920 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Thrugelmir wrote: »
    Besides the capital what else would you bring to the table?
    Knife and fork? ;)
  • Reaper
    Reaper Posts: 7,279 Forumite
    First Anniversary First Post Photogenic
    edited 26 May 2015 at 4:15PM
    This is an adventurous area to be investing in for a novice, and I am guessing you are a novice because you talk of "LLC" which is an American term, in this country it is just "Ltd" (both meaning a private company with limited liabilities).

    If they just raised £6m then they are unlikely to be very interested if you went to them offering to buy a small number of shares off one of the owners, but you never know. As also said above selling them may be all but impossible unless they conduct an IPO.

    There are easier ways of buying and selling private equity namely by buying a private equity fund which invests in the sector. Or for more knowledgeable investors and higher rate tax payers there are SEIS, EIS and VCT. Only with SEIS and sometimes EIS would you get to choose the individual firms they invest in.
  • tmwild
    tmwild Posts: 9 Forumite
    Thanks for the replies all.

    Reaper - you're right on the novice front - I actually meant to say LLP!

    I think I'll stick to mutual funds until a publicly traded company catches my eye in the same way this one has. Not just for the simplicity of making the investment but also the ease of selling my shares when the time comes.
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