Private Equity and Venture Capital

[A98]

Hi all, I have a question regarding Softbank Vision Fund.

Some articles call the Vision Fund the 'largest PE fund', but this fund looks like a venture capital instead of a private equity company as they seek 20-40% ownership and invest in start-ups.

Does this mean that VC is a subset of PE or are they separate? Is it best to refer to the Vision Fund as an investment fund instead of PE or VC fund?

Help appreciated!!

 

[Jaysen]

Hi all, I have a question regarding Softbank Vision Fund.

Some articles call the Vision Fund the 'largest PE fund', but this fund looks like a venture capital instead of a private equity company as they seek 20-40% ownership and invest in start-ups.

Does this mean that VC is a subset of PE or are they separate? Is it best to refer to the Vision Fund as an investment fund instead of PE or VC fund?

Help appreciated!!

It’s a bit of a grey area as the two are often used interchangeably. I think it depends on how broadly you’re defining private equity - if we’re just talking about investing in shares of private companies, you can think of VC as a subset of PE, so calling it one of the largest PE funds wouldn’t be incorrect. On a more narrow definition, I would agree that it’s more of a VC fund.

 

[A98]

Thanks Jaysen, I'm brushing up on PE right now for an upcoming AC with K&E.

I became interested in PE after I had a chat with a PE associate to prepare for a client pitch (during a vacation scheme). I pitched the Softbank Vision Fund as a potential client for their private equity practice that assists PE, venture capital and other funds. At the same time, I didn't really understand the difference between PE and VC so I framed the presentation using my knowledge on PE. It doesn't look like K&E has a venture capital team so I don't want to give wrong information if I end up talking about the Vision Fund and have them pick up on it. Maybe I'm just overthinking, but I'm stuck on how I should explain my interest.

 

[A98]

Hey! I did a lot of research on SoftBank since they were my commercial awareness go-to for the written application. It's a VC fund since they invest in emerging companies (Uber, WeWork, OYO etc). But it's an odd one because they have made such massive investments which rival those of major PE firms - they've really shocked the VC market and inflated valuations/ fundraising. And to repeat Jaysen's point, VC is a subset of PE (early part of the life of a business). Hope that helps!

Thanks Raam! So do you think it would be fine for me to mention Vision Fund when I talk about my aspirations for PE? It's not a direct link, but it led me to researching it