What is the difference between venture capital and private equity?

Venture capital and private equity are both forms of investment, but they differ in a few key ways. Venture capital is a type of equity investment made into young, innovative companies with high growth potential. The venture capital investor provides capital and resources to the company in exchange for equity and a portion of the future profits of the company. Private equity, on the other hand, involves the acquisition of shares of existing companies—usually ones that are struggling or undervalued. The private equity firm or investor acquires the company and restructures it in order to make it more profitable and valuable. Private equity firms typically receive a portion of the company’s profits and may also receive special financial incentives. Both venture capital and private equity are regulated in Washington. The Washington State Investment Board is responsible for overseeing the private equity industry and ensuring compliance with regulations. Venture capital investments are also subject to the state’s securities laws, which must be followed in order to protect investors.

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What is the difference between venture capital and private equity?

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