Private equity

When investments are funded, the manager or investor gets money and the funder demands rights in return. The contractual regulations are the capital. At the same time, every contract is different, and so that the overview remains, capital is divided into groups, for which different criteria are available.
One is the distinction according to whether the contract can be concluded purely privately between two parties, the borrower and the investor, and cannot be easily transferred. One speaks of private capital. It differs from public capital, in which the contracts are transferable and in the form of securities, and markets allow anyone, as it were, to assume the role of investor.

A second distinction is whether it is equity or debt.

Private equity is understood to be the equity of unlisted companies in which the group of equity investors has been determined and another financial investor cannot acquire a stake without the previous equity investors forming their will.

Praktisch gesehen ist Private-Equity das Eigenkapital von kleineren Unternehmungen, von Neugründungen (Startups), und von Unternehmungen, die sich in einer frühen Phase befinden. Hier sind die Risiken oftmals enorm, weshalb Private-Equity in vielen Fällen den Charakter von Venture capital aufweist. Zentrales Merkmal ist der Mangel an Sicherheiten und gelegentlich ist auch noch kein richtiger Sales market gefunden worden.

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