vc means venture capital and pe means private equity investment.

vc, also known as venture capital, is a financing method to provide financial support for start-ups and obtain their shares, which belongs to a form of private equity investment.

Venture capital companies usually invest their funds in emerging enterprises or unlisted enterprises, aiming to help the invested companies achieve greater profits. Therefore, venture capital is regarded as a high-risk and high-return undertaking that pursues long-term profits.

venture capital is called venture capital because there are many uncertainties in the investment process, which brings great risks. Generally speaking, venture capital mainly invests in high-tech start-ups, whose founders have excellent technical expertise but lack experience in company management. In addition, it is also uncertain whether the new technology can be quickly transformed into actual products and recognized by the market. These uncertain factors lead people to think that this kind of investment has high risks, but it is undeniable that venture capital has brought high returns.

private equity investment, referred to as PE(Private Equity), is an investment method of investing in unlisted equity or non-publicly traded equity of listed companies. In the process of implementing the transaction, PE investment usually considers the future exit mechanism, that is, selling its shares through listing, mergers and acquisitions or management repurchase to make a profit, usually in the form of funds as the carrier of fund raising.

PE investment generally adopts equity investment, which rarely involves debt investment. PE investment institutions usually enjoy the right to vote on the decision-making management of the invested enterprises. In terms of investment tools, common stock, transferable preferred stock and convertible bonds are often used.

generally speaking, PE investment is mainly aimed at private companies, that is, unlisted enterprises, and rarely involves publicly issued companies, and does not involve the obligation of tender offer.

what are the characteristics of private equity investment?

the characteristics of private equity investment include a long investment period; Poor liquidity; Wide sources of funds; Pe investment institutions mostly adopt limited partnership system; Diversification of investment exit channels; Take more equity investment methods, etc. It is worth mentioning that in fund raising, it is mainly for a small number of institutional investors or high-net-worth individuals through non-public means.