Private equity investment

Private equity investments are considered to be one of the most significant methods by which entrepreneurs obtain finance. Private equity investments are responsible for funding approximately 25 times the amount of enterprises funded by venture capitalists, annually. In many instances, the source for a private equity investment is an individual with considerable wealth behind him/her, thus providing essential start-up capital to high risk ventures, at their early stages. According to recent estimates, approximately 300,000 American start-up firms have obtained funding from such investors, amounting to over 20 billion USD, at 50,000 deals annually. By comparison, venture capital investors offer between 5 to 7 billion USD, at 1,000 deals annually.A private equity investor typically offers investments amounting to 10,000 USD to 500,000 USD, averaging a quarter of a million US Dollars, typically makes an investment bi-annually and invests in a group of other private equity investors.These investors are one of the most important components of the marketplace, as they fund between 30 to 40 times as many firms as venture capital investors, (estimated at between 20 billion USD to 60 billion USD, annually).

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