Private equity firms mostly buy mature companies that are already established. The companies may be deteriorating or are not making the profits they should be making, due to inefficiency. Private equity firms buy these companies and streamline operations to increase revenues. Usually the objective is to buy a badly managed mature firm, turn it around by putting in professional management, and then selling the firm at a significantly higher value. Private Equity invests in both listed and unlisted companies
Venture capital firms, on the other hand, mostly invest in start-ups with high growth potential. Their objective is to find a few companies that can 10X or 100X their investment. While most of their investments end up at a loss, the few successful companies more than make up for this. VCs almost never invest in listed companies. They usually exit on IPO, or a few years after that.
