Private Equity and Venture Capital

Assignment 9 – 31st January, 2021

G Bhavana Sravanthi
PGP10083
 PIPE stage: Private investment in public equity stage
 Investors invest in ventures at different stages – early stage, late stage/ PIPE stage/
pre-IPO
 Capital invested in early stage – risk capital since they take more risk so expect
more return
 Capital invested in late/ PIPE stage/ pre – IPO: growth capital, these investors
expect less compared to risk capital investors
 Investors either want to exit completely or partially from a venture
 Methods/ modes of exiting:
 IPO – most preferred by private equity investor
 Sale – strategic and financial
 An underwriter is responsible to sell shares and decide the selling price according
to the market conditions and company’s financial standards
 Firms go public – to receive investments for R&D etc, ROI for investors, or in
cases of not able to attract new investors
 Better access to broader funds but more scrutiny. Financing also has a cost.
 Category of investors
 Retail Investors: Investing Less than INR 2,00,000
 Non-Institutional Investors: Investors with amount more than INR
2,00,000
 Qualified Institutional Investors: Qualified Institutions such as
Mutual Funds
 Pros of IPO
 Higher Valuation
 Public Recognition
 Liquidity
 Cons of IPO
 It takes up a lot of resources
 Regulatory requirements
 Must stay profitable to keep decent valuation