Page 103 - Q26 - 0

¥ÿ≈æ“À

(5)
In the case where investment involves a portfolio company operating

a business in Thailand, it is typical for the private equity funds to set
up a Thai-majority-owned special purpose vehicle (the çSPVé) to be

their investment entity. This is essentially for avoiding being subject

to the foreign investment restriction (to be discussed in Paragraph 3.1),

and limiting the fundsû liabilities to the payment for shares in the

portfolio company held by the SPV. Then, the SPV will provide funding

to the portfolio company in the form of equity, debt or hybrid of debt

and equity whereby the debt is exchangeable into equity (See Figure).

The most prevalent types of funding are as follows:

(1) venture capital - venture capital encompasses investments in

a business for its launch, early development and expansion of
commercial operations. It can generally be subdivided into: (a)

seed capital for the conception and research of a new product;

(b) start-up capital for the set-up of a company, including

initial employment, research, product manufacturing, market

testing, marketing and inventory; and (c) expansion capital for

business growth such as increasing the manufacturing
(6)
capacity and expanding the target market;

(5)
The arrays of companies in which the private equity firm is investing are called its
çportfolioé, and the businesses themselves, çportfolio companiesé.
(6)
See MÜLLER, supra note 4 at 12; ENGELHARDT & GANTENBEIN, supra note 4 at 11.

92 ‡≈à¡∑’Ë Ò ªï∑’Ë ˆ˜