What is the difference between private equity and venture capital funding?

The distinctions between private equity and venture capital funding are often misunderstood. While both options offer cash and expertise to drive growth, the scale of investment and methods of working have a clear difference.

Private equity firms tend to back companies that are much more mature in the business lifecycle. They are typically well-established and have a strong track record, demonstrating consistent growth and profitability, with a proven management team at the helm.

The means private equity deals tend to be larger in value and the resultant sale generates higher returns.

Venture capital funding specialises in start-up and early stage businesses, often operating in high-growth sectors such as technology and fintech. While these investments tend to be higher risk, the return potential is high.

When seeking investment, it’s important for management teams to explore multiple avenues to ensure they have the best fit for their business.

Over more than 35 years, LDC has developed a private equity model that sets us apart from the rest of the market. Having invested almost £5billion to date, no other mid-market investor has our scale and breadth of experience.

LDC’s success in helping management team build great businesses speaks for itself, as does the £2.2billion of exit proceeds we generated between 2015 and 2017.