Venture Capital vs. Private Equity: Same capital, very different games

Venture capital (VC) and private equity (PE) are often grouped together, but in practice they play fundamentally different roles in the economy. The difference is less about money—and more about risk, time, and how value is created.

Stage and Risk

Venture capital invests early. VC-backed companies are often pre-profit, sometimes even pre-revenue, with unproven business models but large upside potential. Failure rates are high, and that’s expected. A few winners are meant to pay for many losses.