(1) The investment stage is different. Generally speaking, when the venture capital fund invests, the invested enterprise is still in its infancy and immature, and may even have a new technology, invention or new idea without developing specific products or services. Private equity funds invest in mature enterprises that have formed a certain scale and generated stable cash flow. Even some private equity funds are only keen to invest in Pre-IPO (a relatively short period of time before the company goes public), which is completely different from venture capital.

(2) The closure period is different. It is precisely because many enterprises invested by venture capital funds are still in their infancy that there is a long period from investment to withdrawal. Relatively speaking, the closed period of private equity investment is shorter.

(3) The main industries of investment are different. Venture capital funds usually invest in high-risk and high-return high-tech enterprises. Since 1990s, the main investment objects of venture capital have shifted from genetic engineering and computer hardware to CD-ROM, multimedia, telecommunications, computer software industry and Internet, all of which are high-tech industries. Private equity funds have no such restrictions and preferences. For example, in China, private equity funds prefer traditional industries such as real estate, food and clothing.