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 Equity

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

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

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

    The first sale of stock by a private company to the public. IPOs ...
  6. Venture Capital

    Money provided by investors to startup firms and small businesses ...
Related Articles
  1. 5 Tips For Investing In IPOs
    Investing

    5 Tips For Investing In IPOs

  2. What's the difference between publicly- ...
    Investing

    What's the difference between publicly- ...

  3. How can I sell private company stock?
    Investing

    How can I sell private company stock?

  4. IPO Basics Tutorial
    Retirement

    IPO Basics Tutorial

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center