Private Purchase

AAA

DEFINITION of 'Private Purchase'

A situation in which an investor (either individual or institutional) purchases all of the shares (or a fraction thereof) in a privately-held firm. Private purchases do not involve the use of capital markets and will likely require the skills of a broker.

INVESTOPEDIA EXPLAINS 'Private Purchase'

Venture capitalists commonly use private transactions when changing their positions in a given firm. These positions are commonly held for an extended period of time. Private markets are known for being less liquid and providing less information than the public markets, and the venture capitalist uses this to his or her advantage.

RELATED TERMS
  1. Dealer

    A person or firm in the business of buying and selling securities ...
  2. Private Placement

    The sale of securities to a relatively small number of select ...
  3. Private Equity

    Equity capital that is not quoted on a public exchange. Private ...
  4. Private Company

    A company whose ownership is private. As a result, it does not ...
  5. Broker

    1. An individual or firm that charges a fee or commission for ...
  6. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
Related Articles
  1. Investing

    5 Tips For Investing In IPOs

  2. Investing

    What's the difference between publicly- ...

  3. Investing

    How can I sell private company stock?

  4. Retirement

    IPO Basics Tutorial

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center