What is a VC/PE firm and who are the other players in the eco system?
VC stands for Venture Capital.
A VC firm invests in
· Startups, newly formed companies
· 1 – 2 yrs old
· Small investments from 0.5 to 20 US
PE stands for Private Equity.
A PE firm invests in
· Companies that are up and running
· More than 2 yrs old
· Investments more than 20 US
The primary difference being a VC investor invests in untried and new ventures with small investment and high risks, whereas a PE investor invests in up and running companies looking to expand.
Limited Partners (LP)
They are people with loads of money, which PE/VC firms use to invest in start ups and small companies. They are rich people, companies, banks etc basically anybody who’s got a lot of money. They get returns from the money earned invested in companies.
Investment Bankers
These are banks who advise PE/VC firms, companies, just anybody within the eco system.
Legal Associates
They are lawyers who advise the PE/VC firms and entrepreneurs on the legal matters.
And the last and the most important entity .the ENTREPRENEUR!
