Direct investment, referred to as PE for short, refers to the investment mode in which investment institutions mainly purchase the company's equity and expect to obtain value-added income in the future after purchasing the equity.

Venture capital, also translated as venture capital, is mainly a financing method to provide financial support for start-ups and obtain shares in the company. Venture capital is a form of private equity investment. Venture capital company is a professional investment company, consisting of a group of people with knowledge and experience in science, technology and finance. Through direct investment, we can obtain the equity of the investment company and provide funds to those who need them.

Private placement, that is, private investment funds, refers to investment funds that are raised from qualified investors in the form of non-public offering and invested in investment targets such as stocks, equity, bonds, futures, options, fund shares, etc. ) stipulated in the investment contract, referred to as private equity fund.

2. Different investment methods.

From the perspective of investment methods, direct investment refers to the equity investment in private enterprises, that is, unlisted enterprises. In the process of transaction implementation, the future exit mechanism is considered, that is, through listing, mergers and acquisitions or management buyback, the shares are sold for profit.

Venture capital is a kind of equity capital, which is invested by professional financiers in emerging, rapidly developing enterprises with great competitive potential. Generally speaking, it operates in the form of venture capital fund. The legal structure of venture capital fund is in the form of limited partnership, and venture capital companies, as general partners, manage the investment operation of the fund and get corresponding remuneration.

Although both direct investment and venture capital are investments in pre-listed enterprises, they are quite different in investment stage, investment scale, investment concept and investment characteristics.

3. Different influencing factors

The source of direct investment is the company's own cash; Private placement and venture capital are both Public Offering of Fund, and direct investment is usually related to the company's strategy, which is complementary to the company's main business or the next development direction. First, cultivate through direct investment. For example, the investment of BAT in recent years has a high correlation with the mobile Internet; Private equity and venture capital choose investment stages in many industries: direct investment is not divided into stages, but it feels that small amounts are earlier because of incubation and company cash restrictions; Private placement is in the middle and late stage; Venture capital is early.

References:

Baidu encyclopedia-private placement

Baidu encyclopedia-venture capital