Private Equity Firms

Private equity is an asset class that includes equity securities of companies that are not traded publicly. A private equity firm raises funds and invests in these securities following various strategies like venture capital, leveraged buyout or mezzanine capital.

A private equity firm will obtain a majority or influential minority stake in a company and use that position to restructure the management, capital and organization. The anticipated outcome is an improved company that will translate into high returns for the firm through either:

• A merger or purchase: the company either fuses with another company or is bought by another company. Either of these options can generate big money for shareholders.
• IPO (Initial Public Offering): An IPO allows the public to purchase shares in the company. This is generally a high-yielding stage for a company and therefore the private equity firm also benefits.
  
• Recapitalization: This is when cash is distributed the shareholders.

Link to This Resource: Private Equity Firms

http://privateequityblogger.com/2008/06/private-equity-firms.html

Private Equity Boom

Buyout Boom

Private equity has become an estimated three billion dollar industry, but this was not the case just a few years ago. The following is a video on the resurgence of private equity:

Link to This Resource: Private Equity Boom

http://privateequityblogger.com/2008/06/private-equity.html

The Venture Capital Decline

According to the WSJ, the venture capital industry is shrinking dramatically. The dot com bubble's burst led many to abandon the once-fertile venture capital industry, and in recent years the number of venture capital firms has fallen.

In 2007 the number of venture capital firms investing in U.S. companies was 844, 40 less than in 2006. This compares to the almost 1,200 firms in 2000--during the dot com period. Another startling figure is that of these 844 firms, 224 did not fund any new companies. The National Venture Capital Association's President Mark Heesen predicts even further decline in future.

This year the industry has shown signs that the decline in venture capital firms will continue. Venture Beat reports that in the first quarter of 2008 venture investment fell 8.5%.

John Cook remarks on the effect on Seattle's venture capital industry. Although there are many high-profile venture capital firms in the region, there is a subtle decline in Seattle.

Link to This Resource: The Venture Capital Decline

http://privateequityblogger.com/2008/06/venture-capital-decline.html