Private Equity Funds - Private Credit Funds
A private equity firm or private equity fund consists of a firm that has a large pool of money available to be invested in businesses or to acquire profitable companies. They generally raise their funds from wealthy individuals investing as limited partners, pension funds, university endowments, insurance companies, and other sources. Micro private equity firms generally target smaller companies.
Private credit firms or funds consist of firms that make loans to businesses who may have difficulty securing bank credit or require a longer term loan that may be available from commercial banks. Private credit firms obtain their funds from the same sources as private equity firms.
An equity kicker is a financial incentive whereby a lender provides credit at a lower than market interest rate in exchange for an equity position in the borrower's company. The equity kicker may take the form of stock or warrants.
Accredited Investors - Net Worth Standards
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