I’m trying to understand what is a private equity firm in simple terms.
How do these firms make money, and what types of businesses do they invest in?
Is private equity different from venture capital?
A private equity firm is a money-raising firm used by investors to acquire, develop and eventually liquidate private enterprises. It works by buying companies and adding value through strategic and operational transformation and selling them out or through an IPO.
A private equity firm invests in private or underperforming companies by buying a stake in them, improving their operations and growth, and then selling them for a profit after a few years.
