A portfolio company is a company that represents one specific investment for an investment firm that specializes in investing in private businesses for the purpose of gaining equity in those businesses or buying them out.All of the companies in which a firm invests represent a firm's portfolio.The investment in a portfolio company may take the form of private equity in established companies or venture capital in companies just starting out.Investment fund managers try to build a portfolio of companies that maximizes profit potential for its investors while limiting risk.he investment in a portfolio company may take the form of private equity in established companies or venture capital in companies just starting out. Investment fund managers try to build a portfolio of companies that maximizes profit potential for its investors while limiting risk.