Equity; ownership capital

Ownership

Founder equity

Shares held or funded by the people who establish the business.

No universal returnMandate-specific

The capital-provider mandate, instrument, geography, currency, risk and duration determine the relevant return measure.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Formation to exit
Capital position: Common equity; residual
Common use: Align founders and absorb the earliest risk
Risk lens: Very high concentration
Control: Usually high before outside rounds
Exit: Sale, IPO, dividend or buyback

Illustrative public or category examplesFounding shareholders

Early equity

Friends and family capital

Early money from a founder's personal network, commonly invested through ordinary shares, preferred shares or a convertible instrument.

No universal returnMandate-specific

The capital-provider mandate, instrument, geography, currency, risk and duration determine the relevant return measure.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Pre-seed
Capital position: Common, preferred or convertible
Common use: Fund initial product and market testing
Risk lens: Very high
Diligence: Often lighter; documentation remains important

Illustrative public or category examplesPrivate individuals; names are usually confidential

Early equity

Angel investment

Personal capital invested by an experienced individual into an early-stage company.

No universal returnMandate-specific

The capital-provider mandate, instrument, geography, currency, risk and duration determine the relevant return measure.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Pre-seed to seed
Capital position: Common, preferred, SAFE or convertible
Common use: Fund first hires, product and commercial proof
Risk lens: Very high
Governance: Information or advisory rights may apply

Illustrative public or category examplesAngel investorsAngel syndicatesFounder-operators

Early equity

Seed capital

Institutional or syndicated capital used to test product-market fit and establish repeatable growth.

Historical benchmark; no target IRR6.4% in H1 2025

Cambridge Associates US Venture Capital Index return for the first half of 2025; this is historical period performance, not a forward IRR.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Seed
Capital position: Usually preferred equity
Common use: Reach commercial and product milestones
Risk lens: Very high

Illustrative public or category examplesSequoia CapitalIntel CapitalIFC

Private equity

Venture capital

Pooled private-fund capital invested in high-growth companies, usually through staged minority rounds.

Historical benchmark; no target IRR6.4% in H1 2025

Cambridge Associates US Venture Capital Index return for the first half of 2025; this is historical period performance, not a forward IRR.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Seed to late stage
Capital position: Preferred equity
Common use: Scale a high-growth company
Risk lens: Very high; power-law outcomes
Control: Board, consent and information rights are common
Exit: Trade sale, IPO or secondary

Illustrative public or category examplesSequoia CapitalIntel CapitalIFC venture-capital programmes

Private equity

Growth equity

Minority or structured equity for an established company seeking expansion capital.

Illustrative public proxy10.8% p.a.

KKR 5-year USD expected annualized total return for private equity; this is neither a fund target nor a guaranteed IRR.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Scaling or pre-IPO
Capital position: Preferred or common equity
Common use: Expand markets, capacity or products
Risk lens: High

Illustrative public or category examplesBlackstone GrowthAres Private EquityGIC

Private equity

Private equity fund

A pooled vehicle investing privately in companies through buyouts, growth investments or structured minority stakes.

Illustrative public proxy10.8% p.a.

KKR 5-year USD expected annualized total return for private equity; this is neither a fund target nor a guaranteed IRR.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Established company
Capital position: Common or preferred equity
Common use: Buy, transform and exit a business
Risk lens: High
Holding period: Fund and deal dependent; private funds are illiquid
Control: Often material; buyouts usually control

Illustrative public or category examplesBlackstoneKKRAres Management

Private capital

Family-office equity

Direct or fund investment made by an organization managing one family's wealth.

No universal returnMandate-specific

The capital-provider mandate, instrument, geography, currency, risk and duration determine the relevant return measure.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: All stages
Capital position: Flexible
Common use: Patient direct investment, co-investment or diversification
Risk lens: Mandate-specific

Illustrative public or category examplesDFO ManagementSingle-family officesMulti-family offices

Private capital

HNI investment

Capital invested directly or through advisers by a high-net-worth individual.

No universal returnMandate-specific

The capital-provider mandate, instrument, geography, currency, risk and duration determine the relevant return measure.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: All stages
Capital position: Flexible
Common use: Direct deals, syndicates or private-fund commitments
Risk lens: Mandate-specific

Illustrative public or category examplesIndividual investors; identities may be private

Institutional equity

Sovereign wealth fund equity

Long-duration capital managed on behalf of a state or public mandate.

No universal returnMandate-specific

The capital-provider mandate, instrument, geography, currency, risk and duration determine the relevant return measure.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Growth to mature assets
Capital position: Public or private equity
Common use: Strategic allocation, diversification and national objectives
Risk lens: Portfolio mandate-specific

Illustrative public or category examplesADIAGICPublic Investment Fund

Strategic investment

Corporate strategic equity

An investment by an operating company seeking commercial value alongside financial return.

Strategic and financial caseFinancial IRR may be secondary

Strategic investors may assess market access, technology, supply resilience or synergies alongside financial return.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Early to mature
Capital position: Usually minority equity
Common use: Technology, distribution, supply or market access
Risk lens: High; includes integration and conflict risk

Illustrative public or category examplesIntel CapitalCorporate venture armsIndustry buyers

Real assets

Infrastructure equity

Ownership capital in essential physical or digital infrastructure assets and platforms.

Illustrative public proxy10.3% p.a.

KKR 5-year USD expected annualized total return for private infrastructure; project-level equity IRRs remain transaction-specific.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Development to operating
Capital position: Project or platform equity
Common use: Fund construction, acquisition or expansion
Risk lens: Medium to high

Illustrative public or category examplesBlackstone InfrastructureGICIFC

Real assets

Real-estate equity

Ownership capital exposed to property income, development economics and residual value.

Illustrative public proxy8.9% p.a.

KKR 5-year USD expected annualized total return for private real estate; property strategy and leverage can change outcomes materially.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Development or stabilized
Capital position: Project, JV or property-company equity
Common use: Acquire, develop or reposition property
Risk lens: Medium to very high

Illustrative public or category examplesBlackstone Real EstateADIAGIC

Purpose-linked equity

Impact investment

Capital seeking a measurable social or environmental outcome alongside a financial return.

No universal returnMandate-specific

The capital-provider mandate, instrument, geography, currency, risk and duration determine the relevant return measure.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: All stages
Capital position: Equity, debt or blended
Common use: Finance outcomes with explicit impact objectives
Risk lens: Mandate-specific

Illustrative public or category examplesIFCDevelopment finance institutionsImpact funds

Ownership structure

Minority investment

An equity stake below control, with negotiated protections and information rights.

Illustrative public proxy10.8% p.a.

KKR 5-year USD expected annualized total return for private equity; this is neither a fund target nor a guaranteed IRR.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Growth to mature
Capital position: Common or preferred equity
Common use: Raise capital while retaining control
Risk lens: High

Illustrative public or category examplesGrowth-equity fundsFamily officesStrategic investors

Ownership structure

Majority investment

An investment that transfers voting control to the investor or buyer.

Illustrative public proxy10.8% p.a.

KKR 5-year USD expected annualized total return for private equity; this is neither a fund target nor a guaranteed IRR.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Established company
Capital position: Control equity
Common use: Succession, buyout or platform formation
Risk lens: High

Illustrative public or category examplesBlackstoneKKRAres Management

Buyout

Control buyout

Acquisition of control, often financed with a combination of sponsor equity and acquisition debt.

Illustrative public proxy10.8% p.a.

KKR 5-year USD expected annualized total return for private equity; this is neither a fund target nor a guaranteed IRR.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Mature, cash-generative
Capital position: Control equity below debt
Common use: Acquire and improve an established business
Risk lens: High

Illustrative public or category examplesBlackstoneKKRAres Management

Structured equity

Preferred equity

Equity with contractual priority over common equity for distributions, liquidation proceeds or both.

Deal-specificReliable public range unavailable

A single public range would create false precision. Use the term sheet, comparable transactions and current market evidence.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Growth, buyout or project
Capital position: Above common; below debt
Common use: Bridge a risk or valuation gap
Risk lens: Medium to high

Illustrative public or category examplesPrivate-equity fundsFamily officesReal-estate funds

Listed market

Public equity

Shares traded on a public exchange with market pricing and regulated disclosure.

Illustrative public proxy6.1% p.a.

KKR 5-year USD expected annualized total return for global public equity; this is a portfolio assumption, not a company return target.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Listed company
Capital position: Common equity
Common use: Raise permanent capital or provide liquidity
Risk lens: High; market volatility

Illustrative public or category examplesPublic companiesMutual fundsPension investors

Equity capital markets

Initial public offering

The first broadly marketed sale and listing of a company's shares on a public market.

Illustrative public proxy6.1% p.a.

KKR 5-year USD expected annualized total return for global public equity; this is a portfolio assumption, not a company return target.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Listing-ready
Capital position: New and/or existing shares
Common use: Raise capital and create a public market
Risk lens: High; execution and market risk

Illustrative public or category examplesStock exchangesUnderwritersInstitutional investors

Equity capital markets

Follow-on offering

A public share offering by a company that is already listed.

Illustrative public proxy6.1% p.a.

KKR 5-year USD expected annualized total return for global public equity; this is a portfolio assumption, not a company return target.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Public company
Capital position: Primary and/or secondary shares
Common use: Raise growth capital or sell shareholder stock
Risk lens: High; market risk

Illustrative public or category examplesListed issuersInvestment banksAsset managers

Private placement

PIPE transaction

A privately negotiated investment in a public company's equity or equity-linked securities.

No universal returnMandate-specific

The capital-provider mandate, instrument, geography, currency, risk and duration determine the relevant return measure.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Public company
Capital position: Common, preferred or convertible
Common use: Raise capital faster or with negotiated terms
Risk lens: High

Illustrative public or category examplesInstitutional investorsPrivate-equity fundsHedge funds

Equity capital markets

Rights issue

An offer allowing existing shareholders to buy new shares, usually in proportion to current ownership.

Illustrative public proxy6.1% p.a.

KKR 5-year USD expected annualized total return for global public equity; this is a portfolio assumption, not a company return target.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: Public company
Capital position: Common equity
Common use: Raise capital while giving holders participation rights
Risk lens: High; market and take-up risk

Illustrative public or category examplesListed issuersExisting shareholdersUnderwriting banks

Incentive equity

Employee equity and options

Shares or contractual rights designed to align employees with enterprise value growth.

No universal returnMandate-specific

The capital-provider mandate, instrument, geography, currency, risk and duration determine the relevant return measure.

Last verified: 9 August 2026

Structure, risk and examples

Stage / setting: All stages
Capital position: Options, restricted shares or common equity
Common use: Recruit, retain and align a team
Risk lens: Concentrated employment and equity risk

Illustrative public or category examplesEmployeesManagement teamsFounders

Equity; ownership capital

Read the ownership bargain

Founder equity

Friends and family capital

Angel investment

Seed capital

Venture capital

Growth equity

Private equity fund

Family-office equity

HNI investment

Sovereign wealth fund equity

Corporate strategic equity

Infrastructure equity

Real-estate equity

Impact investment

Minority investment

Majority investment

Control buyout

Preferred equity

Public equity

Initial public offering

Follow-on offering

PIPE transaction

Rights issue

Employee equity and options