Dividend recpitalization and private placement

What is the difference between the two?

1.One of them issues debt and the other issues equity capital.

  1. the one ithat raises dividend capital is an establised company that is being leveraged up to allow the owners to recoup their investment in a shorter time. The one that does private placement is usually a less established firm that is a start up or seed company , and cannot afford to comply with sec and exchange regulations yet.

A dividend recapitalization is paid out to owners so they can pay down some of the debt they acquired buying the company. This leaves the company itself weaker.

A private placement is an issue of securities only to particular investors (other shareholders can not pre-empt as with a rights issue).