𝐏𝐄 𝐯𝐬 𝐕𝐂 – 𝐬𝐚𝐦𝐞 𝐝𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐜𝐞?

Hence the table below which has both.Now that European VCs have earned their stripe, these two worlds are actually edging closer. What is going on?

𝐎𝐧 𝐭𝐡𝐞 𝐕𝐂 𝐬𝐢𝐝𝐞, we are seeing:
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✔️ Larger funds, and as a result, larger teams, and more focus/expertise applied to building sizeable companies rather than rushing to an early exit.
✔️ Bigger investments, with portfolio companies now considering buy-and-build strategies more systematically (e.g. General Catalyst).
✔️ At the very top end, funds transforming themselves in order to be able to hold public equity (e.g. Andreessen Horowitz).
✔️ The ultimate is of course what Sequoia is doing by turning itself into an evergreen fund. The only equivalent I can think of in Europe is M&G Catalyst (M&G was initially a large pension fund and insurance company).

𝐎𝐧 𝐭𝐡𝐞 𝐏𝐄 𝐬𝐢𝐝𝐞, funds are facing a reckoning with the end of low interest rates. To be caricatural, from financial engineers, PE funds need to become value-added investors, something VCs take pride in. So:
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✔️ PE funds are increasingly buying companies which VCs have taken to scale – PE funds or their portfolio companies represent approximately half of the buyers of VC-backed companies (e.g. Bridgepoint buying Lumapps in May 2024).
✔️ PE funds are now even buying early-stage VC-companies with the hope to accelerate their traditional businesses with AI e.g. New Mountain Capital in healthcare.
✔️ PE funds are commonly developing growth capital fund strategies, e.g. Carlyle, KKR Growth, etc
✔️ In fact, traditional PE funds are increasingly becoming multi-strategy asset managers, e.g. Black Rock or Blackstone

Having access to deep pockets is in and of itself a real benefit when building the future. Of course, this is not a systematic recipe for success (e.g. Softbank Vision Fund). But Andreessen Horowitz’s track record (15 years ago they were accused of overpaying to get in - and they did) shows that big money with expertise pays off.
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Expect to see more blurring between VC and PE funds.

📎 Source:
https://www.visualcapitalist.com/worlds-top-50-private-equity-firms-in-2025/

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