Fund Structure
Private Equity
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Quick Answer
A broad category of investment in private companies — encompassing venture capital, growth equity, leveraged buyouts, and distressed investing.
Private equity (PE) is the broad asset class of investing in companies that are not publicly traded. The PE umbrella includes: venture capital (early-stage startups, high risk), growth equity (established growth companies, medium risk), leveraged buyouts (acquiring mature companies with significant debt, primarily financial engineering), mezzanine investing (hybrid debt/equity in late-stage companies), and distressed/turnaround investing (fixing troubled companies). The term 'private equity' is colloquially used to specifically mean LBO (leveraged buyout) firms — KKR, Blackstone, Carlyle, Apollo — which are distinct from venture capital in strategy, structure, and return expectations. PE funds are structured similarly to VC funds (GP/LP, 10-year life, carry) but at much larger scale.
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Further Reading
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How to Write an LPA: The Limited Partnership Agreement Guide for Fund Managers
A practical 2026 guide for venture capital and private equity fund managers on drafting, negotiating, and operating under a Limited Partnership Agreement (LPA): key sections, ILPA standards, costs, lawyer selection, and common mistakes.
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Comparisons
Frequently Asked Questions
What is Private Equity in venture capital?
Private equity (PE) is the broad asset class of investing in companies that are not publicly traded. The PE umbrella includes: venture capital (early-stage startups, high risk), growth equity (established growth companies, medium risk), leveraged buyouts (acquiring mature companies with significant...
Why is Private Equity important for startups?
Understanding Private Equity is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
What category does Private Equity fall under in VC?
Private Equity falls under the fund-structure category in venture capital. This area covers concepts related to how venture capital funds are organized, managed, and governed.
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