VC refers to venture capital and PE refers to private equity investment.

Venture Capital:

venture capital (English: VC for short), also translated as venture capital, is mainly a financing method to provide financial support to 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, which is composed of a group of people with knowledge and experience related to science, technology and finance, and provides funds to those who need funds (the invested company) by directly investing in the equity of the invested company.

Private Equity investment:

private equity ("PE" for short) is also private equity investment. From the perspective of investment mode, it refers to the equity investment in private enterprises, that is, unlisted enterprises. In the process of transaction implementation, the future exit mechanism is taken into account, that is, through listing, mergers and acquisitions or management buyback, the shares are sold for profit.

Extended information:

There are mainly the following modes of private equity investment:

(1) Investment mode of capital increase and share expansion

Capital increase and share expansion is a part of newly issued shares of the company, which will be sold to new shareholders or original shareholders, which will lead to an increase in the total number of shares of the company.

(2) Investment mode of equity transfer

Equity transfer refers to a civil act in which shareholders of a company transfer their shares to others and make others become shareholders of the company.

(3) Other investment modes

In addition to the above two investment modes, you can also use them together, use them together with bond investment, and set up a target enterprise with physical and cash contributions.

Operation mode of venture capital:

Venture capital generally operates in the form of venture capital fund. The legal structure of venture capital fund is in the form of limited partnership, while venture capital companies manage the investment operation of the fund as general partners and get corresponding remuneration.

in the United States, the venture capital fund with limited partnership can get preferential tax, and the government also encourages the development of venture capital in this way.

Reference: Baidu Encyclopedia of Venture Capital?

Baidu Encyclopedia of Private Equity Investment