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. How can I sell private company stock?

    In some instances, both private and public companies may issue shares to their own employees as part of a compensation program. ... Read Full Answer >>
  2. 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 Full Answer >>
  3. Do hedge funds invest in private companies?

    Hedge funds normally do not invest in private companies because of liquidity concerns. Capital funding for private companies ... Read Full Answer >>
  4. Who do hedge funds lend money to?

    Many traditional lenders and banks are failing to provide loans. In their absence, hedge funds have begun to fill the gap. ... Read Full Answer >>
  5. Can mutual funds invest in private equity?

    Mutual funds can invest in private equity indirectly by buying shares of publicly listed private equity companies, such as ... Read Full Answer >>
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    It does not make sense to find the breakeven point using a company's payback period. A company's payback period is concerned ... Read Full Answer >>
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