Private equity is essential for building strong private sectors that create jobs, improve living standards, align with trends and produce tax revenues. The importance of equity investors continues to grow. Contrary to the popular myth that private equity firms weaken companies by stripping them of assets and saddling them with debt, private equity firms build companies; they don't tear them down. Over the past 30 years, private equity has added resources and value to their portfolio companies. A 2008 study by the Boston Consulting Group found that since the 1980s, operational improvement as a source of value has doubled to account for more than a third of value creation. Companies have not yet realized that private equity is a long-term investment that takes years for the full benefits to be realized. This long-term focus aligns the interests of the private equity firm with the company it buys and ensures that the company has lasting success. Starting and building a prosperous business is the ambition of many entrepreneurial minds and has long been the primary source of job creation. Even though talent and ambition with a hint of quality are rarely found, they are found nonetheless. This is where many private equity firms fail to capitalize on the entrepreneurial potential in their markets – they have neither the time nor the resources to waste an idea. There is a notable gap between investors and emerging SMEs. Skepticism lies on both sides, the fact remains that SMEs are reluctant to ask for investment due to their approach to investment, the idea that they are indebted to their investors. We are not discounting the fact…half the paper…years. Innovation is key to building and bridging the gap between venture capitalists/angel investors and potentially the next big startup. Innovation is expensive by default, yet returns are better than the blue chip average. An initial investment of $30,000 requires much more than your $30,000, it requires a precise mix of intellectual and technical resources. Seed is the first stage of venture capital funding. They are often relatively modest, helping founders get back on their feet, build their management team, develop their product, build a business plan, and the like. A properly regulated environment will allow investors to be less skeptical and focus more on developing these ideas rather than focusing on return on investment, which is the ideal scenario for developing a robust economy..