Private capital is money provided to a business as a loan or equity investment that does not come from an institutional source, such as a bank or government entity, or from the public through selling stock on a stock exchange. The money comes from private individuals or a group of individuals who make investments that are not regulated by the government or the rules of a public exchange. Private Capital can be utilized for any purpose agreed between the investor and the business seeking funds. These funds can come in any form such as Venture Capital, Growth Capital, Equipment Lease, Private Equity, Debt Consolidation etc.
Institutional comes from entities which pool money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include banks, insurance companies, pensions, hedge funds, REITs, investment advisors, endowments, and mutual funds. Operating companies which invest excess capital in these types of assets may also be included in the term. Activist institutional investors may also influence corporate governance by exercising voting rights in their investments.