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private equity

Contributor(s): Ivy Wigmore

Private equity is funds belonging to high net worth individuals and organizations that are held to target investment opportunities, such as startups and IPOs (initial public offerings).

Venture capital (VC), probably the best known example of private equity, is one type of risk capital: funding invested, or available for investment, in an enterprise that offers the probability of profit along with the possibility of loss.

Other sources of private equity include angel investors and hedge funds. An angel investor is an individual who invests private funds in a company or product for personal reasons such as a desire to advance a technology or a belief in a product. A hedge fund is sourced by a group of investors that seeks to realize large capital gains through high-risk methods like investing borrowed money.

This was last updated in April 2016

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