Why is protection not always granted during a PE deal

Many different stakeholders are involved in PE deals such as banks, advisors, attorneys, etc….

There is no authority regulating the PE deals.

PE deals are usually more expensive than public equity deals.

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The positive effect on the cost of capital

The signal of great health of the company given to the market when a company is selected as a VBC

Hard and soft knowledge that can be transferred to a company by a PEI

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VCFs and investment Firms

Banks, closed-end funds, investment firms

Investment firms and AMCs

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Investors and management companies accept to get a lower level off profits in terms of capital gains, carried interest and management fees.

Those who need capital can launch an offer on the internet and see whether they are able to collect the amount needed.

It is a very recent practice.

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Psychological constraints on management

Wrong industrial management decisions

New shareholders entrance

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The DCF aims at finding the number of shares bought by the PE, whereas the VCM aims at finding the VBC enterprise value.

The VCM aims at finding the price of the shares bought by the PE, whereas the DCF aims at finding the equity value.

The VCM aims at finding the IRR when the price setting is fundamental, whereas the DCF aims at finding the equity value.

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The AMC must own in every fund, which must be equal to 2% of the fund.

It can create a joint venture and invest 50% in the fund.

It must own 1% of the funds in which it plans to invest.

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funds which invested in seed financing only.

VC funds only and for closed-end funds which leveraged.

venture capital funds, as well as for closed-end funds.

Final Test >>> Why is protection not always granted during a PE deal >>> Private Equity and Venture Capital