How Private Equity Differs From Venture Capital Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Private equity and venture capital are different types of investment. Here are the key differences: Risk level Private equity takes less risk and thus a lower potential return than venture capital. Private equity investments invest in firms with a positive profit line while venture capital investments run negative on the bottom line putting everything into top-line growth. Control level Private equity often takes a controlling position in the company. Venture capital takes only an oversight position in most investments. Stage of business Private equity invests in mature companies with a history of revenue and profits. Venture capital invests in early-stage companies with great promise. Funding source Private equity raises funding from institutional investors. Venture capital raises funding from limited partners who are typically high-networth individuals. Size of investment Private equity often invests substantial amounts of money into the business to increase profitability. Venture capital typically invests smaller amounts of capital to increase the growth rate. Consider these differences in considering private equity or venture capital funding for your fundraise. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let’s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: Check out our other podcasts here: For Investors check out: For Startups check out: For eGuides check out: For upcoming Events, check out For Feedback please contact info@tencapital.group Please , share, and leave a review. Music courtesy of .
