Venture capital is equity or equity-featured capital that seeks investments in new companies, products, processes or services that offer potential for high returns. Venture capital firms invest mostly in early stage companies focused on technology, biotech and cleantech. Venture capital acquires a minority stake, usually less than 50%, in companies. Private equity buys mature companies across all industries, acquiring 100% ownership. Private equity deals are larger, ranging from $100 million to $10 billion, compared to under $10 million for venture capital.

1. BY: SANDESHP
4VP15MBA46

2. International Finance Corporation, defines venture capital
“An equity or equity featured capital seeking investment in
new companies, new products, new process or new services,
that offer the potential of high return on investment”.
E.g., Accel Partners, Atlas venture etc.
Private equity is capital that is not noted on a public exchange.
Private equity is composed of funds and investors that
directly invest in private companies, or that engage in
buyouts of public companies, resulting in the delisting of
public equity.
Institutional and retail investors provide the capital for private
equity
E.g., Goldman Sachs, JPMorgan chase& co. etc.

3. vsPrivate Equity Venture Capital
PE firms buy mature
companies
VC’s invest mostly in
early stage companies
1

4. 2
VC’s are focused on
technology, bio-tech and
clean-tech companies.
PE firms buy
companies across all
industries.

5. 3
PE firms almost
always buy 100% of a
company
VC only acquire a
minority stake which is
less than 50%

6. PRIVATE EQUITY VENTURE CAPITAL
$100million to
$10billion
Bellow $10
million
4
1 million = 10 lakh.
1 billion = 100 crore.

7. PRIVATE EQUITY VENTURE CAPITAL
Use Only
Equity
Combination of
Equity + Debt
5

8. 6
PRIVATE EQUITY VENTURE CAPITAL
TO6
10 TO4 7
EXIT AFTER

9. 7
PRIVATE EQUITY VENTURE CAPITAL
Depends on the inherent
risk of particular firm and
industry.
Many failures, some
solid returns, a few
spectacular successes.

10. POINT OF DIFFERENCE:
1. STAGE
2. COMPANY TYPES
3. PERCENTAGE ACQUIRED
4. INVESTMENT SIZE
5. STRUCTURE
6. TIME HORIZON
7. ROI