Czech Private Equity and Venture Capital Association

Private equity and venture capital (PE/VC) are alternative sources of funding for innovative projects and companies with potential for rapid growth. The term private equity refers to medium- to long-term financing provided in exchange for acquiring a stake in the owners’ equity of enterprises whose shares are not traded on any stock exchange. Funds are invested into companies that have potential for creating value and increasing their market share and whose business plan aims to produce and offer a highly innovative product, process or technology.

If we explore the definitions of private equity and venture capital more closely, we can agree on the following explanation. Both cases concern investment in a non-publicly traded company for which the investor acquires a share in the company’s owners’ equity. The term private equity is the name for the whole group of such investments. Private equity itself comprises both purchases of companies by company management (buyouts) or by external managements (buy-in) as well as venture capital, i.e. the capital invested in a company’s seed, start-up and later growth stages.

In the Czech environment, venture capital is understood as medium- to long-term capital invested in the form of an equity stake in a company. The venture capital fund acquires a share in the company’s registered capital in exchange for the investment, and, in addition to funding, it also provides the firm with professional assistance (the principle of “smart money”). Most often, this assistance takes the form of financial and strategic support in developing the company. It varies for individual investments, however, depending upon what form the investor and enterprise agree. It may involve actively strengthening the team in the top management positions or a passive role as advisor in the financial area. The investor often enhances the company through its beneficial contacts in various business areas and in acquiring new customers.

 


News

  • Wednesday, 3. February, 2016

    Private equity transactions benefit from the good condition of the Czech economy, CVCA and Deloitte agreed

    The growing Czech economy will bring new investment opportunities for private equity funds this year. IT sector, consumer goods industry and manufacturing have particularly strong investment potential. Credo Ventures, a venture capital firm, raised its second fund, which currently has EUR 34 million for investments, while the private equity firm Genesis Capital launched its fourth investment fund raising EUR 60 million in second closing. Enterprise Investors, a large regional private equity firm, demonstrated with the Kofola listing at the Warsaw and Prague Stock Exchange that an IPO is a valid exit route for private equity backed companies in the CEE region.  These and other topics were discussed by a panel held by the Czech Private Equity and Venture Capital Association (CVCA) and Deloitte on 28 January 2016.

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  • Monday, 25. January, 2016

    CHINA CEE INVESTMENT CO-OPERATION FUND INVESTS IN ENERGY 21

    Mid Europa Partners, the leading private equity firm in Central and Eastern Europe and Turkey, announced that it has reached an agreement with CEE Equity Partners, the investment advisor to the China CEE Investment Co-operation Fund (“China-CEE Fund”), to invest in Energy 21.

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  • Thursday, 21. January, 2016

    CMS Report: Central and Eastern European M&A markets diverging

    Some markets see increase in deal value and volume, but CEE M&A activity down overall Private equity fund investment up 16% Investment by US based companies and funds increases by 61%

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