Private equity comes from individuals or firms that buy stakes in private companies. Private equity usually comes from high-net-worth individuals eager to see outsized returns.

The private equity industry comprises institutional investors, such as pension funds, and large private equity firms funded by accredited investors.

Private equity funds are pools of capital to be invested in companies that represent an opportunity for a high rate of return. They come with a fixed investment horizon, typically ranging from four to seven years, at which point the PE firm hopes to profitably exit the investment.

Exit strategies of Private equity holder include IPOs and sale of the business to another private equity firm or strategic buyer.

Venture Capitalists are one of the examples of Private equity.