Private equity and venture capital are two ways business owners can shore up cash to run or grow their enterprise. Many business owners think these two funding options are interchangeable, but there are big differences.

 

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What is the difference between private equity and venture capital?

Private equity and venture capital fall under the broad umbrella of alternative funding, but that’s where the similarities end. These funding methods target businesses at different stages of their life cycle, with owners giving up varying degrees of control.

“Venture capitalists focus on high-growth companies that have the potential to disrupt the industry and are growing at a high rate,” Zsuzsanna Fluck, director of the Center for Venture Capital, Private Equity and Entrepreneurial Finance at Michigan State University, told

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