Venture capital (VC) and private equity (PE) differ significantly in their investment strategies and target companies, yet a gap exists for mid-sized firms that don't fit neatly into either category. Emerging hybrid VC-PE funds aim to bridge this divide by acquiring underperforming startups and turning them around, adapting to current economic challenges and shifting market dynamics. As VC funding declines, these hybrid strategies may become more prominent, emphasizing profitability over growth.