Private equity can be broadly classified into three sub-classes, namely: venture capital, development
capital and buy-out funding.
Because the definitions of the terms ‘venture capital’ and ‘private equity’ vary from country to
country, this section sets out the terminology used in this website to avoid confusion.
SEED includes
• Seed
Financing provided to research, assess
and develop an initial concept before a
business has reached the start-up stage.
START-UP includes
• Start-up
Financing provided to companies for
product development and initial marketing.
Companies may be in the process of
being set up or may have been in business
for a short time, but have not sold
their product commercially.
• Other early stage
Financing to companies that have completed
the product development stage
and require further funds to initiate commercial
manufacturing and sales. They
will not yet be generating a profit.
EXPANSION includes
• Expansion
Financing provided for the growth and
expansion of a company, which is breaking
even or trading profitably. Capital
may be used to finance increased production
capacity, market or product development,
and/or to provide additional working
capital.
• Bridge financing
Financing made available to a company
in the period of transition from being privately
owned to being publicly quoted.
• Rescue/Turnaround
Financing made available to existing business,
which has experienced trading difficulties,
with a view to re-establishing
prosperity.
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REPLACEMENT CAPITAL includes
• Secondary purchase/Replacement capital
Purchase of existing shares in a company
from another venture capital firm or
from another shareholder or shareholders.
• Refinancing bank debt
To reduce a company’s level of gearing.
BUY-OUT includes
• Management buy-out
Financing provided to enable current
operating management and investors to
acquire existing product line or business.
• Management buy-in
Financing provided to enable a manager
or group of managers from outside the
company to buy-in to the company with
the support of private equity investors.
• Venture purchase of quoted shares
Venture purchase of quoted shares with
the purpose of delisting the company. |
AVCA 2008 sponsors:
  
AVCA 2006 sponsors: FMO, CDC,BIO, AFRICAP, ECOBANK,AVANTE CAPITAL & SIFEM
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