Basic concept of private equity investment fund
The so-called private equity investment refers to the capital operation process of non-listed enterprises with high growth, providing them with corresponding value-added services such as management, so as to withdraw through IPO or other means and realize capital appreciation. The interest of private equity investors is not to have dividends and operate the invested enterprises, but to eventually withdraw from the enterprises and realize the investment income.
Private equity investment funds in a broad sense can be divided into Angel investment funds (angel), venture capital funds (VC) and private equity funds in a narrow sense (PE) according to the stage of the projects invested. The projects invested by angel investment funds are mainly in the seed stage, the business model or products of enterprises have not yet been fully formed, and the investment amount is generally small, generally below 5 million yuan; The projects invested by venture capital fund (VC) are mainly in the growth stage, and the business model or products of enterprises have basically taken shape, and some achievements have been made in the market. However, the resources of enterprises themselves are insufficient to support the strategic development of enterprises, and the amount invested by VC funds is generally more than 5 million yuan and less than 50 million yuan. Generally speaking, PE fund refers to private equity investment fund in a narrow sense. Investment projects are mainly in the mature stage, and enterprises have achieved certain success in the market. However, they hope to reach a higher level through financing. The investment amount of PE fund is relatively large and the investment cycle is relatively short. Judging from the advantages of the fund, angels fight for vision, VC fights for judgment and PE fights for resources. However, in practice, the boundary between the three is not so strict.