![]() ![]() Private equity companies make an investment into all types of companies irrespective of the industry that they are currently operating in. Types of industries chosen for investment In venture capital, it is the venture capitalists or VCs that make such an investment. In a private equity mechanism, it is the private equity companies that make such an investment. Venture capitalists prefer to make an investment in companies that are newly set up or are at their early stage and at the same time has a higher probability of growing in the coming time. Private equity companies prefer to make an investment in companies that are already established and are performing well financially too. Given below are the Major Difference between Private Equity vs Venture Capital: Basis of Comparison Private Equity vs Venture Capital Comparison Table The level of returns to expect and receive is huge in private equity investment as compared to returns received in venture capital investment.On the other hand, the exit opportunities available in the case of venture capital are IPO or initial public offerings, mergers and acquisitions, buy-back of shares, venture capital funds, etc. The exit opportunities available in the case of private equity are hedge funds, venture capitalists, entrepreneurship, secondary funds, working with a corporate or a portfolio company.On the other hand, venture capital makes an investment for a maximum of 10 billion dollars for newly set up companies. Private equity companies make an investment of a minimum of 100 million dollars and a maximum of 10 billion dollars. Private equity companies make larger investments, whereas venture capital makes a smaller amount of investments.Private equity companies use a combination of both debt and equity, whereas venture capital companies use only cash or equity.Private equity entities purchase almost a hundred percent of the stakes of an entity, whereas venture capitalists or VCs acquire only a minority stake that is below fifty percent.Private equity companies buy stakes of companies belonging to any industry, whereas venture capital only focuses on start-ups operating into industries such as clean-tech, biotech, and technology.On the other hand, venture capitals purchase the stakes of mostly start-ups or early stage or newly set-up companies. Private equity companies purchase the shares of mature companies that have a guaranteed potential to generate higher returns in the future.The key differences between private equity and venture capital are as follows. ![]() Key Differences Between Private Equity vs Venture Capital Start Your Free Investment Banking CourseÄownload Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others Head to Head Comparison Between Private Equity vs Venture Capital (Infographics)Ä«elow are the Top 10 comparisons between Private Equity vs Venture Capital: ![]()
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