Private equity and venture capital both involve large investments in private companies, but they differ in key ways. Private equity firms invest in already established companies and may overhaul operations or assist management to increase the company's value, typically taking majority ownership. Venture capital focuses on investing in startup companies through smaller ownership stakes and spreading risk across multiple companies, as startups face greater risks of failing to survive and thrive.

1. EDMUNDLAZARUS
Differences
Between PE
and Venture
Capital
EdmundLazarus.net

2. PE and Venture Capital have some similarities. In both cases, investors
are putting very large sums of money into private companies, with the
hope of increasing the value of their initial investments. However, taking
a closer look at the two types of investing, it’s clear that there are
significant differences.
INTRODUCTION

3. In PE companies are already established.
Private equity investors typically invest
through private equity firms which
will buy ownership in underlying
companies. A private equity firm will look
for companies where it can buy ownership
in the firm and then increase the overall
value of the firm.
PRIVATE EQUITY

4. The firm may buy companies and
overhaul operations to increase revenues
or may buy a company in a growing
industry and assist management in
running the company. Typically, the
private equity firm will own most, if not all,
of the company in which it is investing.
PRIVATE EQUITY

5. Venture Capital is focused on investing in
startup companies. The money for
funding venture capital investments often
comes from venture capital firms,
investment banks and other types of
financial institutions.
VENTURE CAPITAL

6. Because investors funding these small
companies are taking a risk on a startup
company to survive and thrive, they are
betting on a big payout to compensate for
risk. They typically spread out their
investments among several startups to
diversify their risk. Venture capital
investors also usually invest into a smaller
percentage of the ownership of a
company, whereas private equity firms
take a major stake in the underlying
company.
VENTURE CAPITAL

7. Edmund
Lazarus
FOUNDING
PARTNER,
EMK CAPITAL
Background
Edmund Lazarus is a
managing partner at
EMK Capital.
Projects
Learn more about
him at
EdmundLazarus.net