Private equity funds make investments directly into private companies. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet.
The majority of private equity consists of institutional investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company.
The private equity funds brokered by Cornerstone are not in the principle of venture capital, including very high risks and great potential returns, but are rather investments in existing successful companies that are seeking to expand their business in size and scope. Furthermore, they are available to the smaller but still accredited investor; they allow shorter project hold periods of 3-6 years; they have investment minimums as low as $5,000; and they can provide substantial return in the form of cash flow during the hold in addition to significant appreciation potential. While still in the field of private equity, these funds have a risk/reward profile similar to other alternative investment funds.