What are the legal forms of private equity investments?

Private equity investments are any investments made on behalf of an individual or company that is not offered on a public stock exchange. These investments are usually not liquid and are not publicly traded. Private equity investments are typically made to help a company finance its operations or to fund the purchase of another company. The legal forms of private equity investments include: • Equity investments – Equity investments are when a private equity firm buys a stake in a company and takes a seat on the board of directors. This stake can be as small as a minority ownership or as large as a majority ownership. • Debt investments – Debt investments are when a private equity firm lends money to a company in exchange for repayment, with interest. This is typically structured as a long-term loan or a line of credit. • Collateral investments – Collateral investments are when a private equity firm invests in a company in exchange for collateral, or collateralized debt. This is often used when a business needs additional capital to fund operations or expansion and is unable to secure it through traditional financing methods. • Mezzanine investments – Mezzanine investments are when a private equity firm provides additional capital to a company and is repaid through a combination of debt, equity, and warrants. In the state of California, private equity investments are regulated by the California Department of Corporations and the Securities and Exchange Commission. Additionally, the state of California requires private equity companies and investors to obtain a license to engage in private equity investments, in order to protect investors.

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What are the legal forms of private equity investments?

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