Alternatives

How to Distinguish Between Growth Equity and Late-Stage Venture Capital

How to Distinguish Between Growth Equity and Late-Stage Venture Capital
clock
2 min 24 sec

Fund sponsors should understand the characteristics of the assets in which they are invested, or are evaluating as possible investments. This better positions them to make informed judgments about their long-term strategies and the construction of their portfolios. This tenet is especially relevant for investors in private equity given the wide dispersion of returns across private equity strategies. Both growth equity and late-stage venture capital focus on investments in growing companies, for instance, but differ significantly in many characteristics.

With a clear understanding of the two, investors can better determine which strategies suit their objectives, and more effectively evaluate fund offerings and general partners when making new investments.

Here we take a close look at what distinguishes the two strategies, with an emphasis on the distinctions at the portfolio company level.

Armed with the ability to distinguish between late-stage venture capital and growth equity, investors become more informed limited partners. Knowing the differences in portfolio company characteristics, investment structures, value creation strategies, and risk/return profiles empowers an investor to better assess general partners, fund offerings, and underlying investments. Ultimately this leads to a more successful implementation of its private equity program.

For more detail about this topic, please see my white paper available here.

Posted by

Share
Share on facebook
Share on twitter
Share on linkedin
Related Posts
Private Markets

2024 Private Equity Fees and Terms Study: Lessons for Institutional Investors

Ashley Kahn
This study analyzes private equity fees and terms to help institutional investors.
Private Markets

Nonprofits: Same Mission, but New Approach to Allocations

Tony Lissuzzo
Callan expert discusses changes in nonprofit allocation trends over the last 20 years.
Private Markets

Some Early Signs of a Rebound, but Challenges Remain

Ashley Kahn
Callan expert analyzes private equity activity in 2Q24, from fundraising to exits.
Public Markets

The Supermicro Conundrum: When Successful Small Cap Stocks Hurt Managers

Nicole Wubbena
Callan expert analyzes the impact of Supermicro on small cap growth managers.
Operations

A Deeper Look at How We Did With Our Capital Markets Assumptions

Julia Moriarty
An analysis of how Callan's Capital Markets Assumptions performed over time by asset class.
Private Markets

Significant Drops in Private Equity Activity From Peak Years of 2021-22

Ashley Kahn
Callan expert analyzes private equity activity in 1Q24, from fundraising to exits.
Private Markets

Sector-Specialist Strategies: What Institutional Investors Need to Know

Chrissy Mehnert
A look at sector-specialist strategies and how institutional investors can analyze them.
Private Markets

Private Equity Sees a Big Slowdown After Frenzy of 2021

Ashley Kahn
An update on private equity performance in 4Q23 and for the year.
Private Markets

Private Equity Investors Focus on Exits as Activity Drops

Alternatives Consulting Group
The Alternatives Consulting Group provides an update on private equity performance in 3Q23.
Operations

What Investors Need to Know About the SEC’s 2023 Private Funds Rules

Alternatives Consulting Group
The Alternatives Consulting Group analyzes the new SEC rules on unregistered private funds.

Callan Family Office

You are now leaving Callan LLC’s website and going to Callan Family Office’s website. Callan Family Office is not affiliated with Callan LLC.  Callan LLC has licensed the Callan® trademark to Callan Family Office for use in providing investment advisory services to ultra-high net worth clients, family foundations, and endowments. Callan Family Office and Callan LLC are independent, unaffiliated investment advisory firms separately registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940.

Callan LLC is not responsible for the services and content on Callan Family Office’s website. Inclusion of this link does not constitute or imply an endorsement, sponsorship, or recommendation by Callan LLC of their website, or its contents, and Callan LLC is not responsible or liable for your use of it. When visiting their website, you are subject to Callan Family Office’s terms of use and privacy policies.