Private Equity Investments

Private equity investments are the most important funding source in the entrepreneurial marketplace. Private equity investments contribute to the funding of around 25 times the number of businesses the venture capitalists fund each year.

Private equity investments are usually derived from a high-net-worth individual who represents an essential source of funding for early-stage, high-risk ventures. It is estimated that one-seventh of the 300,000 + start/early growth firms in the US receive funding from angel investors. This translates into over $20 billion of investment in approximately 50,000 deals each year. This investment group exceeds venture capital sources which are estimated at $5 – $7 billion spread over 1,000 venture capital investments each year.

A typical profile of a private equity investor:

  • Is someone that prefers to invest within one day of travel
  • Is very well educated
  • Tends to invest collectively within a group of other private equity investors
  • Usually invests within the dollar range of $10,000 – $500,000, averaging $230,000
  • Makes one investment every two years

Private equity investors have proven to be the single most important players in the entrepreneurial marketplace. Private capital investors fund thirty to forty times as many entrepreneurial companies as the entire venture capital industry and estimates put the total amount between $20 – $60 billion annually.

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