All the capital in the world won't bring a project online if the business strategy is flimsy or the capital provider is a bad match for the company. No matter the scale of the project, an E&P must have answers ready for many questions, Brian Maxted, a partner at Kosmos Energy LLC, said at the Private Capital for Energy Forum in Houston, sponsored by Cosco Capital Management LLC and Oil and Gas Investor. Questions include: Who are we? What are we trying to do? With how much? How are we going to do it? Where are we today? In 2004, Kosmos was formed from a proven management team, and $300 million in funding from Warburg Pincus and Blackstone Capital Partners. The company is focused on new exploration and petroleum-systems projects in West Africa. The capitalization challenges? "It was exploration-led and it was international," Maxted said. A correct pairing with a funding source was worth the process. "If we had four or five dry holes, we needed to be backed by a team that would still believe that the business could deliver." Douglas Kiesewetter, chief executive of Colorado-based SDG Resources, has begun and exited a private company before. "I confess I'm a serial start-up entrepreneur," Kiesewetter said. "I'm intrigued by wrinkles in the financial system and projects that hold unusual opportunities." SDG often takes on projects that are too small for other companies or too complex and costly for the inexperienced. In the Permian Basin, the company's holdings were underexploited by previous owners. "The [former owners] had zero vision for the property even though they had hunkered down with it through good times and bad. But ultimately they didn't have the capital, the energy or the technical experience to look at the properties with an unjaundiced eye. Many of the areas hadn't undergone technical evaluation since the 1930s." Jim Lind, president of Midstream Energy Services LLC, said it's important for the capital provider and the business plan to be on the same page. "The exit strategy and objectives of both parties must be clearly defined." Midstream raised $70 million in equity from Energy Spectrum Capital IV in 2004 and has established a 40-million-cubic-foot-per-day system in southern Louisiana. There is flexibility that comes with private capital, and it's helpful to producers, said Plantation Petroleum Co. president Thomas Meneley. "Private equity allows a company to focus on operations, rather than Wall Street and its relationship with investors. There is a continued availability of private capital to allow for growth and the burden and expense of reporting and compliance are reduced when you go this route," Meneley said. Keep capital providers in the loop, Meneley added. "They see way more than what you can. Remember they are there to help you, as helping you helps them."