Investors profit when an exit event occurs, such as an IPO or acquisition. They will receive the amount left over after the private equity firm takes their management and performance fees.
Venture Capital
Venture capital is a subset of private equity that specializes in investing in the early, or growth phase, of a company. A firm will raise funds from high net worth or institutional investors to then invest in companies that are at different funding stages. Venture capital is extremely important to start-ups and companies in their early funding stages because they have no revenue or little to no operational history.

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