Private equity is used loosely to the funds of groups and investment companies which provide capital on a negotiated basis in general for private companies, mainly in the form of capital own (ie stock). This category of businesses is a superset that includes venture capital funds, buyout-also called leveraged buyout (LBO) -mezzanine, and growth of capital or expansion. The industry expertise, amount invested, transaction structure preference, and return expectations vary depending on the mission of each.
The venture capital is one of the conditions of financing the most abused, trying to lump many perceived private investors in a category. In fact, very few companies receive funding from venture capitalists, not because they are good companies, but above all because it does not fit the funding model and objectives. A venture capitalist said that his company has received hundreds of business plans a month, examined only a few of them, and has invested in maybe once, and this was a large fund; This ratio of acceptance to the plan submitted plans is common. The equity is mainly invested in young companies with significant growth potential. Industry focus is usually in technology or life sciences, though large investments have been made in recent years in some types of service companies. Most venture investments are in one of the following areas:
路 Biotechnology
路 commercial products and services
 · Computers and peripherals
路 products and services [Consumer
路 Electronics / Instrumentation
 · financial services
路 Healthcare services
 industrial / Energy ·
 · IT Services
路 media and Entertainment
路 devices and medical equipment
路 Networking and equipment
路 Trade / distribution
路 Semiconductors
路 Software
路 Telecommunications
As venture capital funds have grown in terms of size, the amount of capital to be deployed to deal rose, driving their investments in stages ... and now overlap more traditional investments by investors to provide capital growth.
As venture capital funds, equity growth funds are usually limited partnerships funded by institutional and high net worth investors. Each are minority investors (at least in concept); although in reality they both make their investments in a form with the terms and conditions that give them effective control of portfolio companies regardless of the percentage of ownership. As a percent of the total universe of private equity, equity growth funds represent a small part of the population.
The main difference between venture capital and growth equity investors is their risk profile and investment strategy. Unlike strategies of venture capital funds, investors capital growth is not going to portfolio companies to fail, so their return expectations for the company may be more measured. venture funds intention of failed investments and should off-set their losses with significant gains in their other investments. A result of this strategy, venture capitalists need each portfolio company to have the potential for an evaluation output enterprise of at least several hundred million dollars if the company fails. This return policy significantly limits the companies that make it through the filter opportunity to venture capital funds.
Another significant difference between the investors capital growth and venture capitalists is that invest in more traditional sectors such as manufacturing, distribution and services business. Finally, the growth stock investors can consider the operations that allow capital to be used to finance acquisitions or partner a little 'liquidity for existing shareholders; This is almost never the case with traditional risk capital.
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