[Verse 1] Three flavors in the private money game Buyouts purchase companies, take the reins Venture capital seeds the early stage Growth equity scales the middle age [Chorus] Fund life cycles spinning round Raise then invest then harvest sound Pre-money, post-money, NAV divine IRR and MOIC, performance shine J-curve dipping before it climbs Private equity's rhythm and rhyme [Verse 2] Fundraising comes first, LPs commit Investment period, deploy every bit Five years to place the capital raised Then harvest period, exits get praised [Chorus] Fund life cycles spinning round Raise then invest then harvest sound Pre-money, post-money, NAV divine IRR and MOIC, performance shine J-curve dipping before it climbs Private equity's rhythm and rhyme [Bridge] DPI measures what's distributed back RVPI shows remaining in the stack TVPI combines them, total multiple DCF and comps make values suitable [Verse 3] Valuation methods paint the picture clear Pre-money worth before fresh cash appears Post-money after, dilution's effect NAV marks portfolios, gains reflect [Chorus] Fund life cycles spinning round Raise then invest then harvest sound Pre-money, post-money, NAV divine IRR and MOIC, performance shine J-curve dipping before it climbs Private equity's rhythm and rhyme [Outro] Cash flows negative in early years J-curve pattern, then returns appear MOIC tells multiples, IRR the rate Private markets calculate their fate
← Hedge Fund Index Biases | Introduction to Private Equity →