There are four types of players in the venture capital industry:

• Entrepreneurs who start companies and need funding to realize their vision.
• Investors who are willing to take on significant risk to pursue high returns.

Key Takeaways

• Venture capital (VC) is a form of private equity and a type of financing for startup companies and small businesses with long-term growth potential.

However, they differ in four distinct ways:

• The types of companies they invest in
• The levels of capital they invest
• The amount of equity they obtain
• When they get involved in a company’s lifecycle

Key Takeaways

• Venture capital funds manage pooled investments in high-growth opportunities in startups and other early-stage firms.
• Hedge funds target high-growth firms that are also quite risky.