Risk capital
Risk capital financing is a form of private equity in which investors (also known as "angels") provide capital to entrepreneurs and can take various forms depending on the stage at which it is made available.
Seed financing refers to the capital provided by an investor to scale an idea from a prototype to a product or service.
On the other hand, early-stage financing can help an entrepreneur to further expand a business, while Series A financing allows an entrepreneur to actively compete in a market or to create a market.
Leveraged buyout
A private equity firm identifies a potential target and establishes a special purpose vehicle (SPV) to finance the acquisition.
Typically, companies use a combination of debt and equity to finance the transaction.
Non-performing loans
This type of financing is also known as vulture financing and is invested in companies in difficulty whose business units or assets are not sufficiently efficient.
This is the most popular form of private equity financing and involves the complete purchase of a company with the intention of improving its business and financial health and reselling it at a profit to an interested party or going public.