| Private equities are equity securities of companies | | | | this is by planning payments to suppliers, carefully |
| that have not listed their stock on a public | | | | controlling overheads and checking quality control. |
| exchange and are generally thought of as long - | | | | Once you have achieved this you can then move |
| term investments. As they are not listed on an | | | | onto external resources such as friends and |
| exchange, any investor who wishes to sell | | | | family, banks, leasing and public sector grants as |
| securities in private companies must find a buyer | | | | well as many other options which are available. |
| in the absence of a marketplace. Investors in | | | | One of the many reasons why this type of |
| private securities generally receive their return | | | | investment is so popular is because it provides |
| through one of three ways: an initial public | | | | long - term, committed share capital which can |
| offering, a sale or merger, or a re - capitalisation. | | | | help unquoted companies grow and succeed. As |
| It first started in the UK in the late 18th century | | | | the investment is made in exchange for a stake |
| when entrepreneurs found wealthy individuals to | | | | in your company, the investors' returns are |
| back their projects. This method of financing soon | | | | dependent on the growth and profitability of your |
| caught on and became an industry in the late | | | | business. As a result of this investors are only |
| 1970s and early 1980s when a number of private | | | | interested in companies with high growth |
| equity firms were founded. This type of | | | | prospects. However, provided there is real growth |
| investment has since become extremely popular | | | | potential the private equity industry is interested |
| as there are a lot of opportunities for high financial | | | | in all stages, from start - up to buy - out. |
| gains. | | | | The benefits of this investment is definitely worth |
| The main sources of private equity investment in | | | | it as private equity backed companies have been |
| the UK are the private equity firms and business | | | | shown to grow faster than other types of |
| angels who are private individuals who provide | | | | businesses. This is made possible by the provision |
| smaller amounts of finance than many private | | | | of a combination of capital and experienced |
| equity firms are able to invest. | | | | personal input from private equity executives, |
| When you are making a private equity | | | | which sets it apart from other forms of finance. |
| investment it is important to ensure that you are | | | | Private equity can help you achieve your |
| making optimal use of your internal financial | | | | ambitions for your company and provide a stable |
| resources. Some of the many ways you can do | | | | base for strategic decision making. |