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What Is Sexier - Private Equity or Venture Capital?

I started AGC as a boutique private equity firm focusing on the Specialty F&B Space. We started off by targeting control buyouts. Interestingly, the more companies we meet and more investors we talk to, the question I get asked is whether we do growth or venture type investing. All three mentioned are different and here’s how.

See Q2 2021 Performance toward the bottom!


=> Control buyouts are, as the name suggests, control acquisitions either 100% or 75%+ control positions. Buyouts are LOW RISK, LOW-AVERAGE RETURN profile. #buyouts #successionplanning

=> Growth Equity, as I explained in my previous posts, is a non-control investment infusion that’s used for certain expansion and/or growth aspect of the business. LOW RISK, AVERAGE to HIGH RETURNS. #growthcapital#growthequity #expansion

=> Venture, otherwise known as Venture Capital or VC, is yet another asset class in terms of risk/return profile. It refers to investing in early stage, at times pre-revenue and/or pre-earnings companies. The variation of sales/earnings here varies widely. HIGH RISK, HIGH RETURN. #venturefunding#emergingbrands


The point here is you can invest opportunistically in either of the three asset classes based on your risk-return profile.

All three are different asset classes or investment vehicles offering different risk-return profile.


The point here is you can invest opportunistically in either of the 3 asset classes based on your risk-return profile or other words – how much cash $$$ you can part with and be okay if it’s not returned, OR you can take a look at your portfolio as a whole to determine your risk-return profile as an individual, fund or family to understand how much exposure you can afford based on the risk-return appetite.


So, which one is sexier. If you ask me, I’d date all three! Today, we’re focused on Buyouts and Growth Equity. Venture – “you can watch, but can’t touch..”!


Q2 2021 PERFORMANCE:

US Private Equity (Buyout/Growth combined): +14.81%

US Venture Capital: +12.46%

S&P 500: +8.54%


Source: Cambridge Associates

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