Role of Private Equity
Private equity provides long-term, committed share capital, to help unquoted companies grow and succeed. If you are looking to start up, expand, buy into a business, buy out a division of your parent company, turnaround or revitalise a company, private equity could help you to do this.
Private equity allows the development of new technologies and their applications. The industry's focus on improving fundamental business performance means that private equity and venture capital investment may be one of the most potent forces driving economy-wide improvement in corporate productivity.
Obtaining private equity is very different from raising debt or a loan from a lender, such as a bank. Lenders have a legal right to interest on a loan and repayment of the capital, irrespective of your success or failure. Private equity is invested in exchange for a stake in your company and, as shareholders, the investors’ returns are dependent on the growth and profitability of your business.
In the segment related to growth and developemnt of young companies (entrepreneurship), private equity has a very important socio-economic role by funding prosperous commercial projects which would be very difficult to complete, or not at all, without private equity capital. In doing so, private equity fosters developement and technological progress of an economy and social welfare as a whole.