If you're planning on running the next revolutionary business, sooner or later, you're going to need some funding.

Perhaps you've looked into how

companies get funded and you're confused by some of the financial ease. Well, worry no more. Today,

we're going to be diving into two of the most commonly discussed types of funding and sorting out

the differences between them so you can talk business with the top investors the world over.

This is the who,

what, when, and how of private equity and venture capital. What do they have in common? Both private equity and venture capital are forms of private investment, where the companies are not

publicly traded on the stock market. Like all

investments, they both involve the exchange of a substantial sum of money for partial or total

ownership of a business. The company receives a much-needed influx of capital for the business,

and the investor hopes to see a return from their investment. How are they different? Private equity and venture capital differ in the types, sizes, and ages of the businesses

they invest, as well as how much money they invest, how much equity they acquire, and how

involved the investors get with the decisions of the company during the investment period.

Let's start with private equity.

Private equity is reserved for only the most established,

most stable companies in the world. Investors buy into established companies that may be experiencing

hardships or not returning profits to their full potential, with a goal to streamline their operations,

rejuvenate the company, and increase revenue. They typically buy full ownership of a company in what's called

a leveraged buyout, thereby giving them total control of the business. Their investment is

concentrated into one company, as there is little chance of an absolute loss on an already

established business. This buyout usually involves a substantial amount of money, with buyouts

reaching tens,

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