Acquisition by private equity or venture capitalist

NotesQuizObjective Test

Acquisition by Venture Capital or Private Equity

Acquisitions are often made or supported by private equity (PE) or venture capital (VC) investors.

The main differences between these types of investor are as follows:

1) Nature of investment

  • Venture Capital

    VC investors tend to invest in many companies, expecting some to fail, but a small number to make huge returns to compensate for the companies that fail

  • Private Equity

    PE investors tend to invest large amounts in a small number of companies.

2) Type of target companies

  • Venture Capital

    VCs tend to invest in young companies especially start-ups

  • Private Equity

    PEs tend to invest in mature established companies

3) Typical shareholding

  • Venture Capital

    less than 50%

  • Private Equity

    100%

NotesQuizObjective Test