Institutions equity is a financial institution whose main purpose is to take temporary stakes in the capital of companies not listed, usually non-financial and real estate nature. The venture capital entities can take temporary stakes in the capital of companies listed on stock exchanges so long as such companies are delisted within twelve months of the making of participation. An example of this type of investment the company has been on Twitter by venture capital firms.
The aim is that with the help of venture capital, the company will increase its value and investment when ripe, the capitalist is removed at a profit.
The venture capitalist seeks to take shares in companies belonging to dynamic sectors of the economy, which is expected to have above-average growth. Once the enterprise value has risen enough, hedge funds are withdrawn from the business to strengthen its profitability. The main exit strategies that arise for an investment of this type are:
Sale to a strategic investor
IPO (Initial Public Offer) of shares of the company
Repurchase of shares by the company
In recent years there has been very often the sale to another private equity firm. The operational risk capital valuing the business plan of the projects presented to them by entrepreneurs through Investment Committee, which discussed the desirability of entering the shareholders of these companies.