Private equity funds differ from traditional venture capital funds. List and discuss three differences between them

What will be an ideal response?

Answer: Private equity funds differ from traditional venture capital funds. VC funds usually 1) operate mainly in highly developed countries, 2) invest in start-up firms with the goal of exiting the investment with an IPO placed in those same highly liquid markets, 3) very little VC is available in emerging markets, partly because it would be difficult to exit with an IPO in an illiquid market. The same exiting problem faces the private equity funds, but they appear to have a longer time horizon, 4) VC appear to have a shorter time horizon, 5) Private equity funds invest in already mature and profitable companies, 6) Private equity funds are content with growing companies through better management and mergers with other firms.