Private Equity’ simply means shares in a company that is not listed on the stock market. But the term has come to describe the group of firms that invest other people’s money in companies who have already been through the VC stage and have established products and revenues. Rather than backing fairly untested businesses and founders like VC’s, they typically focus on restructuring the companies they invest in to optimise their financial performance. As the people whose money they invest demand a substantial ‘return on their investment’ within a defined number of years, private equity firms impose specific financial performance milestones on the companies they invest in, leading up to the ultimate sale of their shares.

British Private Equity & Venture Capital Association (BVCA)

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