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.

Private equity investment (PE) refers to equity investment in unlisted companies through private equity funds. In the process of transaction implementation, PE will consider the future exit mechanism, that is, through the company's initial public offering (IPO), mergers and acquisitions (M & amp； A) or MBO, etc

2. Different characteristics

In terms of fund raising, it is mainly raised by a few institutional investors or individuals in a private way, and its sales and redemption are carried out by fund managers through private consultations with investors. In addition, the investment method is also carried out in the form of private placement, which rarely involves the operation of the open market and generally does not need to disclose the details of the transaction.

Venture capital is called venture capital because there are many uncertainties in venture capital, which bring great risks to investment and its return.

3, the operation mode is different

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, and venture capital companies, as general partners, manage the investment operation of the fund and get corresponding remuneration. In the United States, limited partnership venture capital funds can get tax incentives, and the government also encourages the development of venture capital in this way.

The operation of private equity investment refers to the overall operation process of private equity investment institutions in fund establishment and management, project selection, investment cooperation and project withdrawal. It is an exclusive secret that the different operation modes of private equity investment directly affect the return level of investment.

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