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

  • Monday, 31. August, 2015

    Record 290 Central and Eastern European companies receive private equity and venture capital investment in 2014

    A record 290 companies in Central and Eastern Europe received private equity and venture capital investment in 2014 as capital invested by funds across the region increased by 66% on previous year to €1.3bn, according to new data released today by the European Private Equity and Venture Capital Association (EVCA). At the same time, fundraising increased in 2014 more than threefold to €1.5 billion and exits stood at €1.3 billion (measured at original cost), up 32% on previous year.

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  • Tuesday, 4. August, 2015

    Genesis Capital launches a new private equity fund – GPEF III

    With an initial size of EUR 45 million the fund may grow to as much as EUR 80 million. Private individuals can now invest into the GPEF III through a fund of qualified investors. Since 1999, Genesis Capital's funds have provided funding to more than 30 enterprises in the Czech and Slovak Republics.

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  • Monday, 27. July, 2015

    CVCA 2014 Activity Report

    CVCA publishes the brochure summarizing PE and VC activities in CR in 2014.

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