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MVC Capital, Inc. Common Stock Message Board

  • mcmacdaddyjack mcmacdaddyjack Dec 20, 2010 10:09 AM Flag

    How do the equity investments pay off?

    This may be a dumb question but I'm new to this and I'm trying to understand how the equity invesments in these small companies pays out. When MVC buys equity in these small, private companies it seems that there is no liquidity so the investment just has to sit. I understand the idea that as a company grows the value of the investor's share grows in proportion but how does the money come out unless the company does an IPO and pays off the owners or the company buys it's equity back?

    I guess the hope is that some of these companies will do very well and be winners that go public at some point so MVC can cash out of the investment at a big profit, I hope that actually happens. It just seems to me that a lot of these equity investments are going to be very stagnant for a long time. What interests me here is the possibiliy of a few of these investments doing really well. If one or two of these small companies really made it big it would be nice.

 
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