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Private equity is a source of capital apart from debt provided to help fund a business's growth or to provide an opportunity for owners to sell all or part of their business. A private equity investment firm purchases an ownership stake in the business, becoming partners with the business owners. The investment firm then shares the financial and operational risks and rewards equitably with them. Investment structures are mutually agreed upon by the private equity firm and business owners and are tailored to the specific business to maximize the benefits to all owners. Because the relationship is a partnership, the investment firm contributes its expertise to material financial and strategic decisions and works alongside management and owners to increase the overall value of the business. |
