When we look at the world of equity investments, there are two main types of equity that you should know about private equity and public equity. Let's break down what makes each one unique.

Private equity is all about investing in companies that aren't traded on the public stock market. It's a bit like an exclusive club where only certain investors can join. These are usually people or groups with a lot of money, like wealthy individuals or investment firms. They don't just give money to any company they pick those they believe will grow a lot in the future. Within private equity, you might hear about things like venture capital and seed capital. Venture capital is money given to young, small companies that have the potential to grow and become big companies. Seed capital is the very first funding that helps start a new company. However, private equity goes beyond the startup stage, and there is a significant focus on mature companies too. Take buyouts, for example. Private equity firms might buy a majority stake in any established company with the goal to reinvigorate them, streamlining operations or repositioning them in the market. In all these different cases, the investment horizon is long term. Private equity isn't watched over by the government as much as public equity, and it's harder to quickly sell these investments and turn them into cash, which makes them relatively illiquid. Moving over to public equity, here's where the stock market comes into play. This is the day-to-day trading of company shares that anyone can participate in. It's the kind of investing most people are familiar with. You buy shares, the prices go up and down, and you try sell at the right time to make a profit. Public equity is under the watchful eye of regulators. They make sure everything is fair for the investors. Another perk of public equity is liquidity. You can usually sell your shares quickly if you need the cash, which is not something you can always do with private equity.