Venture capital is a practice of investing in small scale industries at the early stage, but venture capitalist usually works in the messier. They invests in small firms which are many, where their ability to take high risk is awarded with big profit. Establishing career in the Equity firms and in the venture capital firms is mostly looking for jobs in finance. Private equity is usually about taking the company, existing cash flow and existing product then restructuring the company to optimize its financial performance. When the private equity works right, it can save poorly performing companies and turn them into profitable companies.
Private equity starts with existing but under optimized companies, but venture capital starts with crazy people.The most common question arises in the life of an entrepreneur and job seeker MBA's is how to become a venture capitalist. Students studying in finance, commerce or doing a PHD in finance starts dreaming in the very beginning of their career is to become a venture capitalist, A angel investor.A giant in the field of investing in all the big or small firms spews money in the long term.
Pursuing career in venture capital and want to invest in the establishment of businesses at the earliest stage, being able to turn early stage businesses to private equity transaction can make a person a whole lot of money, but some people don't understand the transaction like this. Most of the private equity firms are looking to take solid high equity businesses rather than operating as an individual entity in the business.
Venture capitalist plays a different role at different stages of the investing life. As an analyst, venture capitalist is responsible for a lot of mundane(research and development) work which are operated in the venture capital firms, keeping an ear on the ground, reading all the publications and news prevailing around the market. Data collection and analysis, ability to grasp the essentials of various niche industries
As a partner the venture capitalist is expected to be the brand that draws all initial and working capital needed in the firm and also called as Entrepreneur. They are responsible for building brand, raising funds and investment. There exist is bigger, faster and efficient.
Equity researchers whereas generally focus on a small group of stock within an industry or geographic region they become expert in a particular company. Their role as analyst they constantly communicate with the management teams of their companies under coverage, maintain comprehensive financial models about the growth of the companies, quickly respond to the news prevailed regarding them, communicate new developments, ideas of investors,banking and sales force and deals with all clients and general public.
Lastly, we can now say that equity capitalist focuses on buy companies across all the industries, but venture capitalist focused on technology biotech and clean tech.
Equity holders acquired almost always 100% of the company whereas venture capitalist acquire minority stakes less than about 50%.stake
Equity investor mostly interested in buying matures firms, public sector firms whereas venture capitalist invests in early stage firms.
Equity holder invests in big in a particular company, but venture capitalist invests a small amount of money in dozens of companies. So it is just that failure with one company is not huge to venture capitalist in comparison to equity. Invest in 1 big winner means you are set for the life.
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