A venture capital fund is a professionally managed pool of capital that is raised from public and private pension funds, endowments, foundations, banks, insurance companies, corporations, and wealthy families and individuals. Venture capitalists (VCs) generally invest in companies with high growth potential that have a realistic exit scenario within five to seven years.
In the world of middle-market buyouts, non-traditional funds (or fund-like groups) are playing an increasingly active role in the private equity domain. They include fundless sponsors, family offices, and even limited partners making direct investments in businesses. In this article, we will explore differences between fundless sponsors and more traditionally structured private equity funds.
Private equity and venture capital firms invest in different companies and for different reasons. In simplest terms, private equity firms invest money into private companies.* Venture capital can be viewed as a segment of private equity, at least from an academic point of view.