A Quote by Stephen Pagliuca
I've probably done more venture capital deals and expansion financings than I have done private equity deals. But both are the same. Private equity companies have also built jobs.
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I delivered lectures, and I was also a consultant for international companies in finance, both private equity and big venture capital funds.
We really wake up every day trying to build businesses. That is the goal of private equity. It's a misnomer out there that private equity profits by shrinking companies. In fact, it's just the opposite. Private equity creates value by growing great companies.
Big banks have long had private equity divisions that put up capital for deals too complex or risky for individual shareholders to finance.
State funds, private equity, venture capital, and institutional lending all have their role in the lifecycle of a high tech startup, but angel capital is crucial for first-time entrepreneurs. Angel investors provide more than just cash; they bring years of expertise as both founders of businesses and as seasoned investors.
The private equity world is a relatively small one. There are currently probably a few thousand professional jobs worldwide. In private equity, that's probably about all there is. So in the scheme of things, the firms are all relatively small.
Private equity has absolutely no reason to exist. The private equity holder has all the upside and the banks all the downside.
I'm amazed by the potential of more companies employing integrated philanthropic initiatives at earlier stages in their life cycle. What if this were done on an even more massive scale? Consider what would happen if a top-tier venture-capital firm required the companies in which it invested to place 1% of their equity into a foundation serving the communities in which they do business.
Being a good private equity investor is more complicated than it seems. I would say that there are a few characteristics that are important. If you look at the skill set that you need to ultimately be a successful private equity investor, at least at the senior level, you have to be, in this business, a good investor. You have to be able to help companies perform and you have to have judgment around exiting investments. If you look at the skill sets there, they include some things you can teach and some that you can't.
Private equity firms aren't necessarily evil by definition. There are many stories of successful turnarounds fueled by private equity, often involving multiple floundering businesses that are rolled into a single entity, eliminating duplicative overhead.
Infrastructure done right can help working people; infrastructure done wrong is just more money for private equity.
Hedge funds, private equity and venture capital funds have played an important role in providing liquidity to our financial system and improving the efficiency of capital markets. But as their role has grown, so have the risks they pose.
One thing I'm so grateful for is sidestepping the usual venture capital, private equity route. My friends who have gone that way are many times beholden to their boards of directors, to 'sell' ideas to a team.
When I was a CEO, I thought I understood private equity. I didn't. And what I've learned since my retirement, and since becoming directly involved in the world of private equity, points the way to a new career path for thousands of talented senior executives - and a new engine for value creation.
I think this is also a great time to invest in private equity, helping companies grow from the ground up.
The stock market has gone up and if you are stock picking, that's fine, you may do a bit better than the market. But if you want to play in another game where you can get rapid increases of value and so on and so forth, this apparently has become the new parlour game, to invest in these companies and many their cases, the private equity that has been piling in onto of the venture capital is creating the unicorn, in other words the company with the $1 billion valuation.
There's almost too much venture capital in India - there are issues with seed capital, but for venture capital, there's a lot money chasing deals here.
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