Initial Public Offering

An Initial Public Offering (IPO) is when a company first issues common stocks or shares to the public. For smaller companies, this is a chance to gain capital for expansion and large privately owned companies opening up to be publicly traded. Investors take a risk investing during the IPO because it is difficult to predict how the shares will do without prior data and the IPO is typically a turbulent transitioning period for the company. The Initial Public Offering is one way that private equity firms receive returns on their investments.

Link to This Resource: Initial Public Offering

http://privateequityblogger.com/2008/06/initial-public-offering.html

Private Equity Fund

A private equity fund is a pooled investment vehicle that invests in unregistered equity securities. A private equity fund is managed by a private equity firm. The fund invests directly in a private company or "buys out" a public company resulting in a delisting of public equity. Capital investments from the fund are used to strengthen and expand a healthy business, or restructure the operations of an underperforming business. Private equity investors make a long-term commitment hoping for a reversal of a distressed company or an event that results in a liquidation of assets like the a big company purchasing the company or an Initial Public Offering.

Link to This Resource: Private Equity Fund

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