Private equity and venture capital: players, trends, regulation, and how to crack the cases
Examples of firms by region, what changed from 2024 to 2026, venture capital math, regulation basics, and typical case prompts.
Industry brief, with a one-minute summary: Private equity and venture capitalFirm processes and online tests change from year to year and differ by office. Use this to prepare, and confirm the exact current steps on the firm's own careers page.
Key takeaways
- Private equity cases test two things at once: whether the market and the company are attractive, and whether the price and the plan can deliver the return the fund needs.
- Common traps: Confusing MOIC with IRR.
- But cash back to investors stayed low.
- Fundraising is harder. Bain reports buyout fundraising fell 16 percent to about USD 395 billion in 2025, while unspent buyout capital (dry powder) stayed near USD 1.3 trillion.
Key idea
Private equity cases test two things at once: whether the market and the company are attractive, and whether the price and the plan can deliver the return the fund needs.
| Region | Private equity (examples) | Venture capital (examples) |
|---|---|---|
| US and global | Blackstone, KKR, Apollo, Carlyle, TPG, Bain Capital | Sequoia Capital, Andreessen Horowitz, Accel |
| Europe | EQT (Sweden), CVC, Permira, Cinven, Ardian (France) | Index Ventures, Atomico |
| Gulf | Investcorp (Bahrain); sovereign investors such as Mubadala, ADQ, and PIF co-invest in deals | BECO Capital, Global Ventures, STV |
| India | ChrysCapital, Kedaara, Multiples; global firms with India teams | Peak XV Partners, Accel India, Elevation |
| Southeast Asia and China | Hillhouse, PAG; Temasek and GIC invest directly | East Ventures, Openspace |
| Africa and Latin America | Helios Investment Partners, Development Partners International (Africa); Patria (Latin America) | Partech Africa, Kaszek (Latin America) |
So-what
For a ranking by capital raised, see the PEI 300 list from Private Equity International. In the Gulf and Asia, sovereign funds often act like PE firms themselves.
Trends from 2024 to 2026 (checked 28 September 2026)
- Deals came back in 2025. Bain reports global buyout deal value of about USD 904 billion in 2025, up 44 percent, and exit value of about USD 717 billion, up 47 percent (Global Private Equity Report, February 2026).
- But cash back to investors stayed low. Distributions to LPs were about 14 percent of fund value in 2025, below 15 percent for four years in a row, and about 32,000 unsold companies were worth about USD 3.8 trillion (Bain). The average holding period at exit is about 7 years, longer than the 5 to 6 years of 2010 to 2021.
- Fundraising is harder. Bain reports buyout fundraising fell 16 percent to about USD 395 billion in 2025, while unspent buyout capital (dry powder) stayed near USD 1.3 trillion.
- New exit routes. The volume of GP-led and LP-led secondary deals grew 41 percent in 2025, and GP-led continuation funds, where a GP sells a company from an old fund to a new fund it also manages, grew 62 percent, though they are still less than 10 percent of total exit value (Bain).
- Venture capital is dominated by AI. Crunchbase counts about half of global venture funding in 2025 going to AI companies. In the first quarter of 2026 alone, foundational AI model developers such as OpenAI, Anthropic and xAI raised about USD 178 billion, about double what they raised in all of 2025 (Crunchbase).
Venture capital follows a power law: most startups fail or return little, and one or two big winners return the whole fund. So a VC asks "can this company become very large?" before "will it survive?". Rounds are named by stage: pre-seed and seed (an idea and a small team), Series A (early product and customers), and Series B and later (scaling).
A VC fund invests USD 5 million in each of 20 startups, USD 100 million in total. One company returns 50 times its investment, three return 3 times, and the other sixteen return nothing. What multiple of its money does the fund return, before fees?
Fund managers are regulated (for example as investment advisers in the US, and under the AIFMD rules in the EU). Large deals need competition (antitrust) approval, and many countries screen foreign investment in sensitive sectors such as defence, data, and infrastructure, for example CFIUS in the US and investment screening in the EU and India. Tax treatment of carried interest is debated in several countries. Debt levels in deals are shaped by bank and lending rules.
| Case prompt | Structure hint | First driver to check |
|---|---|---|
| Should our PE client buy this company? (commercial due diligence) | Market attractiveness, company position, plan achievability, risks and upside | Market growth rate versus the growth in the business plan |
| How can the new owner raise EBITDA in 3 years? | Revenue (price, volume, mix, new markets, add-ons) and cost (procurement, labour, footprint) | Pricing: is the company charging less than the value it delivers |
| What price can the fund pay? | Exit value at a realistic multiple, minus debt, compared with the target MOIC and IRR | The realistic exit multiple, not the entry multiple |
| Should we do a buy-and-build in a fragmented market? | Number of targets, integration synergies, multiple gap between small and large companies | How many acquirable targets exist and at what multiples |
| Should a VC invest in a fintech startup? | Market size, team, product traction, unit economics, path to scale | Customer acquisition cost versus lifetime value, and growth in active users |
So-what
Always tie the answer back to returns. A great company bought at too high a price is a poor investment.
Confusing MOIC with IRR. Assuming the exit multiple will be as high as the entry multiple. Forgetting debt paydown as a source of return, or forgetting that debt adds risk. Paying the seller for synergies that only the buyer can create. Judging only the market and not whether this company can win in it. In CDD, trusting the management plan without testing it against customer interviews.
Related modules: "Mergers, acquisitions, and due diligence" (case type) is the main companion to this module; "Market study and industry analysis" practices the market half of a CDD; "Investment and capital project decisions" covers NPV and IRR; "Organization and post-merger integration" covers what happens after a deal. The asset and wealth management module explains the LPs, and the industry-fundamentals module explains unit economics.
What is the main purpose of commercial due diligence?
In an LBO, EBITDA and the multiple stay flat, but the company repays debt from its cash flow. What happens to the equity value?
Why can a VC fund succeed even if most of its startups fail?
Sources for this lesson (5)
- Bain & Company: Global Private Equity Report 2026 press release (February 2026)
- Crunchbase News: the big funding trends of 2025 in charts
- Crunchbase News: venture funding to foundational AI startups in Q1 2026
- Private Equity International: PEI 300 ranking of private equity firms by capital raised
- Recognized public explanations of case-interview concepts and frameworks
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