Q: What is venture capital?

A: Venture capital (VC) is a form of private equity and a type of financing that investors provide startup companies that are believed to have long-term growth potential.

Q: What is the difference between venture capital and private equity?

A: Private equity firms mostly buy mature firms across any industry that are already established. Private equity firms seek to obtain total control of the companies in which they purchase so they can make improvements, increase revenues, streamline operations, and/or improve profitability. Venture capital investing generally involves investing in startups or younger companies, primarily in technology, biotechnology or “new economy” type industries.  Venture capital investors do not generally seek a majority stake or obtain control of the companies in which they invest.

Q: What is the Difference Between Private Equity and Hedge Funds?

A: Private equity funds invest in private companies and usually take ownership stakes. These fund managers work with the private firms to increase value over the long-term. By contrast, hedge funds invest capital for short-term returns through many different vessels, including stocks, bonds, private equity, and commodities. Typically hedge funds utilize complex trading strategies to capitalize on short-term market movements and inefficiencies.

Q: What is a Unicorn Company?

A: A unicorn company, or unicorn startup, is a private company with a valuation over $1 billion. This term was first coined by Aielee Lee in 2013, after the mythical animal to represent the statistical rarity of such successful ventures.

Q: What is a FinTech Company?

A: A FinTech, or Financial Technology company integrates new technology with financial service offerings. FinTech companies disrupt and compete with traditional financial methods. Artificial intelligence, blockchain, cloud computing and big data are referred to as the “ABCD” of fintech.

Q: Why Should I Invest in Private Equity?

A: Private equity managers now manage $10 trillion in assets, a sum that has quadrupled over the past 15 years. More and more investors are utilizing this asset class to capture the growth and accompanying returns that companies can experience before they go public. Today, 80% of family offices across the globe invest in Private Equity.

Q: How does Global Alts compare to a typical Private Equity Manager’s fee structure?

A: Many private equity managers charge a two-and-twenty fee structure. This means investors pay 2% per year of AUM plus 20% of returns above a specified hurdle rate. Global Alts operates a 2/1/10 fee structure. This means 2% for the first year of AUM, 1% in years thereafter, plus 10% of returns above a specified hurdle rate.