What does vc fund mean?

Private equity investment is attracting more and more attention from high-net-worth investors. The methods of equity investment and VC investment make it difficult for some investors to distinguish between angel investment. What does VC fund mean? What is the difference from angel investing?

What are the rules for splitting and merging hierarchical funds? What is the difference between fund accounts and private equity?

VC venture capital:

Venture investment is the investment of capital in the research and development of high-tech and product products that contain the risk of failure, aiming to promote the commercialization and industrialization of high-tech achievements as soon as possible. ization, an investment process in order to obtain high expected annualized expected returns on capital.

Venture investment has the following characteristics:

1. Most of the investment targets are small and medium-sized enterprises in the entrepreneurial stage, and most of them are high-tech enterprises;

2. The investment period is at least 3-5 years, and the investment method is generally equity investment, usually accounting for about 30% of the equity of the invested company, without requiring a controlling stake, nor any guarantee or mortgage;

3. Investment Decision-making is based on a high degree of specialization and procedure;

4. Venture investors generally actively participate in the operation and management of the invested enterprises and provide value-added services; venture investors generally also have an interest in the future of the invested enterprises. Financing needs at each stage of development are met;

5. Since the purpose of investment is to pursue excess returns, when the value of the invested company increases, venture investors will withdraw capital through listing, mergers and acquisitions or other equity transfers. , to achieve added value.

Angel investment:

Angel investment refers to wealthy individuals investing in original projects or small start-ups with specialized technologies or unique concepts to make one-time early investments. It is a risk A form of investment.

Usually angel investors do not have very high expectations for returns, but a return of 10 to 20 times is enough to attract them. This is because when they decide to invest, they often invest in 10 projects in one industry at the same time. , only one or two projects may succeed in the end, and only in this way can angel investors share risks. Its characteristics are as follows:

1. The amount of angel investment is generally small, and it is a one-time investment, and its review of venture companies is not strict. It is more based on the subjective judgment of investors or determined by personal likes and dislikes. Usually angel investment is invested by one person and the investment is taken away as soon as the investment is good. It is an individual or small business activity.

2. Many angel investors are entrepreneurs themselves and understand the difficulties entrepreneurs face. Angel investors are the best sources of financing for start-up companies.

3. They are not necessarily millionaires or high-income earners. Angel investors could be your neighbors, family members, friends, corporate partners, suppliers, or anyone else who is willing to invest in a company.

4. Angel investors can not only bring funds, but also a network of contacts. If they are well-known, it can also increase the company's credibility.