Hi all, I am kinda confused with the terms below: 1) Entrepreneur 2) Investor 3) Private equity Which of the above are identical? Thanks
None. Investors refer to the LPs who invest in a PE fund. A PE fund in turn invests in portfolio companies. These portfolio companies are run by the entrepreneurs who started them. Go back and read some more.
Here’s a better way to think of it. Let’s say you have a Fidelity large cap fund. This fund is equivalent to the PE company. They invest in companies. In Fidelity’s case, they buy publicly traded stock. In the case of a PE fund, they buy private companies. Who are the investors at Fidelity? These are just various high net worth individuals, institutions, etc. The same thing applies to PE investors. Who are the entrepreneurs? If Fidelity buys Microsoft stock, the entrepreneurs are the people who run Microsoft. In the case of a PE fund, the entrepreneurs are the people who run those private companies.