Private Equity and Venture Capital Funds’ Investments Decline 4% To $5.3 Billion In March

Subject :Economy

Section: National Income

Concept –

Venture capital and private equity are two types of financial assistance that are used by companies in different stages.
Private Equity is a large investment in developed companies and venture capital is a small investment usually made in initial stages of development of a company.
Private equity funds refer to investments made by investors for investment purposes.
Whereas, venture capital refers to funding to those ventures that are backed by new entrepreneurs, have high risks, and who require money to shape their ideas.

Venture Capital

Venture capital is referred to funds invested by individuals or investors to start-ups or small companies aspiring to establish a fresh concept and new entrepreneur. All those new private companies who cannot raise their funds from the public sector may raise funds from the venture capital.
This type of investment indicates high risk but is supported by fresh and top qualified entrepreneurs. Venture Capital firms assist developing businesses in their initial stages before making it public.
It is a popular funding process and sometimes required to raise money for bank loans, capital markets, or other debt instruments. This type of investor is known as a Venture Capitalist, and the capital they provide is called equity capital.

Private Equity

Private equity can be defined as the capital investment, which is made by companies or investors in the private firms that are not a part of the stock exchange. These fund investments are made by the high-net-worth firms or individuals. These investors acquire private companies shares or earn authority of public companies to take them private and de-list from public stock exchanges.
Private Equity firms purchase an existing company and help them to develop and expand.
This entity has become an essential part of the financial services and is one of the attractive funding options.