---
title: "What Is Private Equity? Private Equity Glossary"
description: "Private equity is money from investment funds used to buy or invest in private companies. The fund works with management to grow the business, then sells its..."
url: https://capstreet.multisites.ai/glossary/private-equity
publisher: Capstreet
phone: +1-713-332-2700
contact: https://capstreet.multisites.ai/contact
---

Fundamentals

# Private Equity

Private equity is money from investment funds used to buy or invest in private companies. The fund works with management to grow the business, then sells its stake later.

Private equity means investment funds that buy all or part of private companies. Investors put money into a fund. The firm uses that money to buy businesses, helps them grow and later sells them.

For example, a firm buys 70% of a services company, and the founder keeps 30%. Over the next few years, the firm helps the team add sales staff, upgrade systems and buy smaller competitors. When the firm sells, the founder's 30% sells too.

This matters to you because a private equity buyer is different from a competitor. It does not plan to merge you away. It plans to back your team and grow the company. Many deals are [leveraged buyouts](https://capstreet.multisites.ai/glossary/leveraged-buyout), and many keep the owner invested through [rollover equity](https://capstreet.multisites.ai/glossary/rollover-equity).

Capstreet is a Houston private equity firm founded in 1990. Learn how a sale works in [selling your business to private equity](https://capstreet.multisites.ai/sell-your-business-to-private-equity).

[Read nextHow we invest](https://capstreet.multisites.ai/what-we-do)

## Related terms

-   [Leveraged Buyout](https://capstreet.multisites.ai/glossary/leveraged-buyout)
-   [Rollover Equity](https://capstreet.multisites.ai/glossary/rollover-equity)
-   [Financial Buyer](https://capstreet.multisites.ai/glossary/financial-buyer)

## Ready to get started? Let’s talk.

Tell us about your company and what you want next. Conversations are private, and there is no obligation.

[Start a conversation](https://capstreet.multisites.ai/contact)

[(713) 332-2700](tel:+1-713-332-2700)[connect@capstreet.com](mailto:connect@capstreet.com)

![Capstreet team members at a Houston elementary school for Houston Reads Day](https://capstreet.multisites.ai/_astro/houston-reads-day.DxNd9bIr_tggWP.webp)