It is an investment operation in the risk capital of companies, generally unlisted, through the temporary acquisition of shareholdings with the aim of divesting them over a medium-long period of time (3-10 years) realizing a capital gain from the increase in the value of the company, after having financed it in its initial phase (early stage) or development (expansion financing). The term venture capital refers to equity investments in companies that are still young to finance their start-up, early development, or expansion. Venture capital: supporting start-ups at the beginning of their journey.Leveraged buyout targets typically include mature companies that generate strong operating cash flow, resulting in high revenue. Leveraged buyout (LBO) refers to the purchase of all or a large part of a company or division through the equity of a small group of investors in combination with a significant amount of third-party capital. Leveraged buyouts: financially accompanying acquisitions.This type of capital requirement may also include financing an acquisition or entering a new market without changing control of the company. Growth capital typically refers to investments in established companies that need capital to expand or restructure businesses. Growth capital: contributing to the growth of companies.those economic-strategic aspects of corporate finance.ĭepending on the phase in which the participation takes place, there are three types of Private Equity: These are, therefore, activities of making lasting and significant shareholdings in the capital of companies with the aim of increasing the value of the participation in the medium term, to then achieve a substantial gain at the time of the disposal of the same.įrom a legal point of view, the elements that distinguish Private Equity must be sought in the context of “mergers & acquisition” operations, i.e. This term refers to those investment operations in generally unlisted companies, carried out by professional operators, through participation in the company’s risk capital. Otherwise, venture capital deals with transactions carried out by institutional investors (funds of various kinds) that enter the capital of a company in the start-up phase (start-up) or that are going through a period of expansion. Specifically, private equity refers to all transactions carried out by institutional investors in companies that already have a consolidated history behind them and need financial partners to carry out a restructuring, change ownership or carry out development plans (for example expand internationally). The differences that exist between venture capital and private equity are mainly related to the objectives set by the related funds, as VC was born as a subcategory of private equity.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |