The different roles played by venture capital and private equity investors on the investment activity of their portfolio firms

  1. Ferrer, María Alejandra
  2. Bertoni, Fabio
  3. Martí, José
Zeitschrift:
Small Business Economics

ISSN: 0921-898X 1573-0913

Datum der Publikation: 2011

Ausgabe: 40

Nummer: 3

Seiten: 607-633

Art: Artikel

DOI: 10.1007/S11187-011-9384-X GOOGLE SCHOLAR lock_openOpen Access editor

Andere Publikationen in: Small Business Economics

Ziele für nachhaltige Entwicklung

Zusammenfassung

Venture capital (VC) and private equity (PE) investors play different roles in their portfolio companies. We argue that this will translate in a recognizable difference in the investment sensitivity to cash flows of portfolio companies and its evolution after the first investment round. We hypothesise that VC, thanks to its ability in overcoming asymmetries in information, will entail a reduction in the financial constraints which hampered the growth of investee firms. We predict, instead, a greater dependency of investments to cash flow for PE-backed companies, driven by the renewed interest for growth of their management combined with higher leverage. We find evidence confirming our hypotheses on a large panel of Spanish unlisted firms in low and medium technology sectors, where both VC and PE firms are active.

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