What is the difference between PE and VC and private equity funds?

PE is different from VC and private equity funds in nature and use.

1, with different properties.

Venture capital mainly refers to providing financial support for start-ups and acquiring company shares. Venture capital is a form of private equity investment. PE investment is "private equity investment", which is an investment in unlisted shares or non-publicly traded shares of listed companies. Private equity funds raise funds from specific investors in a non-public way and invest in specific objects.

2, the purpose of use is different.

Private equity funds are raised by means other than mass communication, and promoters set up investment funds to invest in securities by collecting funds from non-public multi-subjects. Most of the funds of venture capital companies are used to invest in start-ups or unlisted enterprises (although the current laws and regulations have greatly relaxed the use of funds), rather than for the purpose of operating the invested company.

The source of funds for private equity investment is non-public offering to natural persons with risk identification ability or institutional investors with affordability.

Extended data:

Venture capital generally operates in the form of venture capital fund. The legal structure of venture capital fund is in the form of limited partnership, and venture capital companies, as general partners, manage the investment operation of the fund and get corresponding remuneration. In the United States, limited partnership venture capital funds can get tax incentives, and the government also encourages the development of venture capital in this way.

PE investment takes the form of non-public private placement, with only a few institutions and individuals participating. Secondly, PE investment lasts for a long time and lacks an open trading market. This feature determines that the liquidity of PE investment is poor, and it is only suitable for idle funds of high-net-worth customers, such as investing with 5%- 10% of total assets.

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