| A mutual fund is an investment company that | | | | investments in younger companies, usually in new |
| pools the varied resources of more than one | | | | technologies, new marketing concepts, or new |
| individual together and invests this money | | | | products. Usually subdivided in the age of the |
| according to a prospectus that contains the | | | | companies that it invests in, venture capital likes |
| general financial goals of the funds members. Each | | | | to work with start-up companies more than it |
| MF is different. Some funds specialize in certain | | | | does established ones.o Growth capital equity |
| types of investments only, like stocks or bonds, | | | | investments are usually minority investments in |
| or currency. Other funds spread out investor's | | | | older companies that need capital to either |
| money across a broad range of different types | | | | restructure or expand operations.o Secondary |
| of investments to offer their investors more | | | | investments are made in existing private equity |
| security by diversifying. | | | | assets to shore up and strengthen the original |
| Mutual funds are tradable securities and can be | | | | investment. |
| bought and sold freely, at the current value of | | | | There are many other investment strategies that |
| the securities invested in. The money invested | | | | can be considered private equity investments. A |
| belongs to each individual investor and that | | | | real estate purchase from a distressed seller can |
| investor can withdraw from the fund at any time. | | | | be seen as a leveraged buyout. Investments in |
| Equity investments are different. Private equity is | | | | different publics' works projects are often part of |
| an asset class the contains equity securities that | | | | a privatization initiative on the part of the |
| cannot be publicly traded. These usually come | | | | government. |
| from private money that either invests in the | | | | So then, these type investments are generally |
| company or acquires it outright. The term equity | | | | non -publicly tradable securities that usually involve |
| investment can mean other things in other | | | | private cash. |
| nations. When private equity is needed it comes | | | | In both cases the amount of risk each investor |
| mostly from institutional investors. | | | | incurs depends on the type of investment. |
| There are several different types of private | | | | Obviously someone investing with venture capital |
| equity described below:o Leveraged buyouts or | | | | will be at higher risk then someone investing in a |
| LBO's are essentially buyouts in with the | | | | LBO of an established company that operates in a |
| leveraged company sells control of the company | | | | safe sector. |
| and its assets.o Venture capital refers to | | | | |