What is the difference between venture capital and private equity?

Venture capital and private equity are both forms of financial investments that businesses use to raise capital. However, there are some key differences between the two. Venture capital is a form of long-term financing that is used by high-risk businesses in order to help them grow and expand. It is usually given to companies that are young and unproven, and need help from an external source of capital to develop their product and start generating revenue. Venture capital investments are typically in the form of equity, and the investor (often a venture capital firm) will typically take an active role in the business through management and advising. In contrast, private equity is a form of financing that is used by established companies that are looking to expand or restructure. Unlike venture capital, private equity investments are usually in the form of debt, and the investor (usually a private equity firm) will typically take a passive role in the company. Private equity investments are typically for longer periods of time than venture capital investments, and there are more detailed terms and conditions involved with these types of investments. In Tennessee, private equity investments are regulated by the Tennessee Securities Act of 1982 and must follow the same guidelines as any other investment in the state. In order to legally conduct private equity business, an individual or firm must meet the criteria set out in the Tennessee Securities Act.

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What is the difference between venture capital and private equity?

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