Home
For Entrepreneurs
For Investors
Investors Directory
Industry Events
News & Updates
Articles
Glossary
Resources
Partners
Featured Companies
Advisory Positions
About Us
Contact Us
 

 

 
Enter your email to receive insights into VC/PE market

 
 

 

 

Private Equity and Venture Capital Glossary



Definition realized investment

Returns on private equity investments are created through a combination of these three methods: debt repayment or cash accumulation through cash flows from operations, operational improvements that increase earnings over the life of the investment and multiple expansion, selling the business for a higher multiple of earnings than was originally paid.

As such private equity investments are typically realized through one of the following avenues:

  1. an Initial Public Offering (IPO) – shares of the company are offered to the public, typically providing a partial immediate realization to the financial sponsor as well as a public market into which it can later sell additional shares;
  2. a Merger or Acquisition – the company is sold for either cash or shares in another company;
  3. a Recapitalization – cash is distributed to the shareholders (in this case the financial sponsor) and its private equity funds either from cash flow generated by the company or through raising debt or other securities to fund the distribution.



 

 
Have A Different Definition?

Want to enhance or revise the definition for this term?
Please submit your suggested change/improvement to our editorial board.


 

 
Home | News | Terms of Use | Privacy Policy | Contact Us
Copyright 2004-2008 VentureChoice Inc. All rights reserved.