“ Private Equity &

Angel Financing”

Group Members: × Deepa Rose Jacob× Eby Jose× Jojy Abraham

Definition of 'Private Equity'Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet. 

• The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company.

• Private equity is a form of equity investment into private companies that are not quoted on a stock exchange.

• aimed at gaining significant, or even complete, control of a company in the hopes of earning a high return.

• A private equity investment will generally be made by a private equity firm, a venture capital firm or an angel investor.

• The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company.

ADVANTAGES OF PRIVATE EQUITY

• The universe of potential company investments for private equity is huge. It is a vast and unchartered land of opportunity.

• Private equity firms are extremely selective and spend significant resource assessing the potential of companies, to understand the risks and how to mitigate them.

• Private equity firms invest in a company to make it more valuable, over a number of years.

DISADVANTAGES OF PRIVATE EQUITY

• Restricted access• Barriers to entry• Private companies are illiquid by their

nature• Higher costs

List of private equity firms

• TPG Capital• The Carlyle Group• The Blackstone Group• Kohlberg Kravis Roberts• Warburg Pincus• Goldman Sachs Principal Investment Area• Advent International• Apollo Global Management• Bain Capital• CVC Capital Partners

Definition of 'Angel Investor'

An investor who provides financial backing for small startups or entrepreneurs. Angel investors are usually found among an entrepreneur's family and friends. The capital they provide can be a one-time injection of seed money or ongoing support to carry the company through difficult times.

Angel Investor

An investor who provides financial backing for small startups or entrepreneurs.An angel investor or angel (also known as a business angel or informal investor) is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital, as well as to provide advice to their portfolio companies.

The advantages of angel investing:1. Can provide the needed capital for a startup. 2. Ability to raise capital in small amounts. 3. Flexible business agreements.4. Can bring forth vast knowledge and experience

to a new company.5. Does not require high monthly fees.6. Are located everywhere, in practically all

industries.

The disadvantages of angel investing:

1. Rarely make follow-on investments 2. Can actually be deceptive3.  Can be costly 4. Do not have national recognition5.  Active company involvement can lead to problems 

Venture capital• Venture capital (VC) is financial capital provided to early-stage,

high-potential, high risk, growth startup companies.• A venture capital fund refers to a pooled investment vehicle (in

the United States, often an LP or LLC) that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans. These funds are typically managed by a venture capital firm, which often employs individuals with technology backgrounds (scientists, researchers), business training and/or deep industry experience.

Venture capital Structure

Distinctions between angel investors and

venture capitalistsThere are four key distinctions:1. The amount of money invested2. The professionalism of the investor3. Whose money is being invested4. Whether the investor takes a seat on the

company’s board.

THANK YOU