Equity-worthiness and equity-willingness: key factors in private equity deals

Pasquale Massimo Picone, Arturo Capasso, Pasquale Massimo Picone, Rosario Faraci

Risultato della ricerca: Article

3 Citazioni (Scopus)

Abstract

While access to private equity funds (PEFs) provides a unique opportunity for firms to set up sturdy growth paths, how PEFs select companies is an unknown process to entrepreneurs and business owners. This study aims to offer insights regarding the private equity market to entrepreneurs searching for external capital. We analyzed a novel dataset of 240 pre-deal negotiations between small- and medium-sized Italian companies and a closed-end fund. Results indicate that the successful closing of a deal depends on more than just the target firm's equity-worthiness (i.e., the company's ability to meet the expectations of a private equity investor). In fact, there is another dimension: the target firm's equity-willingness (i.e., the company's motivations to accept an outside equity investor). We summarize the results of our study by building a 2x2 positioning matrix on the basis of the target firm's equity-worthiness and equity-willingness. This matrix enables entrepreneurs to grasp how private equity investors evaluate their firms.
Lingua originaleEnglish
pagine (da-a)637-645
Numero di pagine9
RivistaBusiness Horizons
Volume57
Stato di pubblicazionePublished - 2014

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Factors
Equity
Private equity
Willingness
Entrepreneurs
Investors
Closed-end funds
Positioning
Small and medium-sized companies
Owners
Equity markets

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Marketing

Cita questo

Equity-worthiness and equity-willingness: key factors in private equity deals. / Picone, Pasquale Massimo; Capasso, Arturo; Picone, Pasquale Massimo; Faraci, Rosario.

In: Business Horizons, Vol. 57, 2014, pag. 637-645.

Risultato della ricerca: Article

Picone, PM, Capasso, A, Picone, PM & Faraci, R 2014, 'Equity-worthiness and equity-willingness: key factors in private equity deals', Business Horizons, vol. 57, pagg. 637-645.
Picone, Pasquale Massimo ; Capasso, Arturo ; Picone, Pasquale Massimo ; Faraci, Rosario. / Equity-worthiness and equity-willingness: key factors in private equity deals. In: Business Horizons. 2014 ; Vol. 57. pagg. 637-645.
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