THE DISTINCTION AND POSITION OF VENTURE CAPITAL AND PRIVATE EQUITY FUNDS
Keywords:
venture capital and private equity funds, corporate finance theory, hedge fundsAbstract
Private equity and venture capital funds represent an impor-tant source of financing for small and medium-sized enterprises in developed countries, while in developing countries their significance is unjustifiably neglected. The developing countries' markets, on the other hand, are beco-ming more and more attractive to investors coming from developed countries. Since developing countries lack in capital, there is a significant potential in which venture capital funds and private equity funds can invest as well. The aim of the paper is, through the conceptual distinction between venture capital and private equity, to make clear how these funds operate, and to position them in relation to other forms of financing available to small and medium-sized enterprises.
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