PE refers more to the company's development to a relatively mature stage and a large amount of investment, especially in the Pre-IPO stage where the turnover and EBITA reach a certain range. VC pays more attention to the early investment of start-ups (small turnover and EBITA, and even most of them are not profitable), and the investment amount is smaller than PE. After the financial crisis in 2008, the United States strengthened its supervision over the financial sector, including the supervision of PE (in a broad sense). Dodd-Frank Act (Dodd-Frank? Act) Part 4, "20 10 Private Equity Investment Consultant Registration Act", requires that all PEs except venture capital (VC) should be registered and supervised by the Securities and Exchange Commission (SEC) of the United States. Previously, in addition to listing, PE did not need to be registered and publicly disclosed. Therefore, the US Securities and Exchange Commission defines VC to distinguish it from regulated PE.
1.VC: At the early stage of the company's development, there were relatively mature business plans and business models, and it has already started to make profits. Some VCs will ask for profit or income scale.
At this time, the entry of VC is very important, which can play a role in enhancing the company's value, including helping it gain recognition in the capital market and laying the foundation for subsequent financing; Enable the company to obtain funds to further explore the market, especially when it is most necessary to burn money; Provide certain channels to help the company expand its market.