The difference between Private Equity, Growth Capital, Evergreen Funds and Family Offices
Frequently, at Shurman, we receive inquiries about various investors and whether they are suitable to partner with. Our response is always tailored to your specific personal objectives, company strategies, and financial aspirations. Although there are notable variances within each classification, here is a broad overview. Private equity, growth capital, evergreen, and family offices are distinct investment funds, each with its own distinctive features and investment tactics.
Private equity: Private equity firms typically invest in companies that are not publicly traded and are looking to grow or improve their operations. They usually take a controlling stake in the company and work to improve its performance with the aim of selling the company for a profit in the future. Private equity firms often target mature companies with stable cash flows that can benefit from operational improvements and strategic initiatives
Growth capital: Growth capital is a type of investment that is focused on helping companies expand and grow. Unlike private equity, growth capital investors typically take a minority stake in the company and provide capital to help it grow but do not typically take a controlling stake. Growth capital investors typically target companies that are in the expansion phase and need capital to invest in new products, services, or markets.
Evergreen (growth) funds: Evergreen growth funds are investment funds that do not have a fixed term, unlike traditional private equity or venture capital funds. Instead, they are structured as permanent capital vehicles and have a long-term investment horizon. These funds often focus on investing in established, profitable companies with a track record of growth and stability.
Family offices: Family offices are private wealth management firms that typically invest on behalf of a wealthy family or a high-net-worth individual. They may invest in various asset classes, including private equity, growth capital, and evergreen growth funds. Family offices can play a key role in the private equity and growth capital ecosystems, providing capital for investment and serving as a source of potential deal flow for private equity and growth capital firms.
In summary, private equity, growth capital, evergreen growth funds, and family offices are all types of investment funds that focus on different stages and sorts of a company's growth and development. What fits best and how to work with the different options depends mainly on personal, strategic and strategic preferences.
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