How do private equity agreements differ from public markets?

Private equity agreements differ from public markets in several ways. In the private market, the terms of the agreement are negotiated between the private equity firm and the company they are investing in. They often include specific clauses about how the company should be managed, what kinds of returns the private equity firm expects and other expectations. In contrast, in public markets like the stock exchange, companies do not negotiate specific terms of an agreement with investors. Instead, investors buy and sell stocks or bonds in a company and the company issues quarterly reports and other financial information about their performance. In addition, the private equity model is more restricted in terms of who can buy shares in a company. Typically, investors must be accredited or have pre-existing relationships with the private equity firm or company they are investing in. On the other hand, anyone can buy and sell stocks in the public market and the information is publicly available. Lastly, the terms of private equity investments are often longer than those in public markets. Private equity investments often require a long-term commitment from both the investors and the companies they are investing in. In comparison, stocks can be bought and sold quite quickly in the public markets.

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How do private equity agreements differ from public markets?

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