When it comes to raising capital, not all investors—or their money—are created equal. If you’ve ever wondered how venture capital (VC) and private equity (PE) differ, you’re not alone. Both play vital roles in a startup’s funding journey, but they operate at very different stages of growth, with distinct goals and strategies.
Let’s break it down by the stages of investment to make this crystal clear.👇
The 5 Key Phases of Startup Fundraising
Every company that scales from scrappy startup to powerhouse enterprise follows a fundraising arc. Here’s how VC and PE fit into the story:
1. Angel (Pre-VC)
💡 This is where it all begins: a bold idea, a passionate founder, and a whole lot of risk.
- Focus: Backing high-potential ideas before there’s a product, revenue, or even customers.
- Investors bet on vision, not validation.
- Typical Check Size: $10,000 – $250,000
- Examples: Y Combinator, SV Angel, Initialized
Who invests? Angels, accelerators, and early believers willing to take a chance on an unproven concept.
2. Seed (Venture Capital)
Once there’s some early traction—maybe a prototype, a few users, or a killer founding team—it’s time for seed funding.
- Focus: Build the product, expand the team, and gain early traction.
- VCs are looking for potential product-market fit.
- Typical Check Size: $250,000 – $2 million
- Examples: Seedcamp, Redpoint, Greylock
Why it matters: This stage bridges vision with execution, giving startups the resources to prove they’re onto
something big.
3. Growth (VC/PE Blend)
By now, the company isn’t just an idea—it’s a validated business model.
- Focus: Scale operations, expand markets, hire aggressively.
- Investors want fuel for rapid growth.
- Typical Check Size: $10 million – $50 million
- Examples: Accel, Bain Capital Ventures, PSG
Crossover zone: At this stage, you’ll see both venture capital and some private equity firms participating.
4. Growth (VC/PE Blend)
By now, the company isn’t just an idea—it’s a validated business model.
- Focus: Scale operations, expand markets, hire aggressively.
- Investors want fuel for rapid growth.
- Typical Check Size: $10 million – $50 million
- Examples: Accel, Bain Capital Ventures, PSG
Crossover zone: At this stage, you’ll see both venture capital and some private equity firms participating.
5. Late Stage / Buyout (Private Equity)
This is where the big players step in.
- Focus: Streamlining operations, maximizing efficiency, positioning for IPO or acquisition.
- Private equity takes majority control, often buying out founders or early investors.
- Typical Check Size: $100 million – billions
- Examples: Silver Lake, Thoma Bravo, Carlyle Group
Exit strategies dominate: PE firms aim for a profitable exit—whether through IPO, merger, or acquisition.
Venture Capital vs. Private Equity: Quick Cheat SheetThe Quick Take
If you’re still wondering how venture capital and private equity stack up, here’s your cheat sheet:
How Virtual Data Rooms Like ShareVault Fit Into the Picture
Whether you’re raising a Series A or preparing for a private equity buyout, there’s one tool that becomes mission-critical: the virtual data room (VDR).
Here’s why:
- Every phase is critical. You have to always be prepared.
- Investors need secure access to sensitive documents.
- Founders need to control who sees what—and when.
- Both sides need an organized, audit-ready workspace.
A virtual data room like ShareVault provides a secure, centralized platform to share critical financials, IP, contracts, and due diligence documents with investors—without risking data leaks or compliance violations.
For venture capital rounds, VDRs help streamline early diligence by providing controlled access to your startup’s cap table, product roadmap, and customer contracts.
For private equity deals, VDRs play an even bigger role:
- Handling large-scale due diligence across multiple bidders.
- Supporting buyouts, mergers, and acquisitions with clean documentation trails.
- Reducing friction in complex transactions where compliance and security are non-negotiable.
In a world where deals are moving faster—and stakes are higher—tools like ShareVault don’t just make collaboration easier; they make it safer, smarter, and more professional.
Ready to Raise Smarter?
No matter where you are on your fundraising journey, understanding the difference between VC and PE—and leveraging the right tools like ShareVault—can help you move faster, minimize risk, and put your best foot forward.
👉 Want to learn more about how ShareVault empowers startups and scaleups? Get a demo today and see how we help companies close deals with confidence.
