Venture capital is a form of private equity, but there are significant differences between venture capital and private equity investments. Venture capital and private equity both provide funding for companies seeking funding; however, venture capitalists typically specialize in clean energy, biotechnology or technology startups.
Private equity firms focus on more established companies in a wide range of fields. Additionally, private equity firms tend to buy entire companies whereas venture capital buys equity in startups. Another important distinction between venture capital and private equity is that private equity investments usually entails buying an entire company in full, whereas venture capitalists tend to purchase equity shares in startups ranging from 1% to 50%.