Private Purchase

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.

BREAKING DOWN '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.

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RELATED FAQS
  1. What's the difference between publicly- and privately-held companies?

    Privately-held companies are - no surprise here - privately held. This means that, in most cases, the company is owned by ... Read Answer >>
  2. How can I become a venture capitalist?

    Find out what it takes to become a venture capitalist, and read about some of the primary attributes private equity firms ... Read Answer >>
  3. What is the difference between private equity and venture capital?

    Learn the differences between private equity and venture capital, especially in terms of how these types of firms invest ... Read Answer >>
  4. What type of funding options are available to a private company?

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  5. How is venture capital regulated by the government?

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    Read about the kinds of industries that tend to receive the most venture capital funding and why private equity investors ... Read Answer >>
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