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Private equity investment criteria : an experimental conjoint analysis of venture capital, business angels, and family offices

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Abstract
We use an experimental conjoint analysis to investigate the investment criteria of 749 private equity investors, distinguishing between family offices, business angels, venture capital funds, growth equity funds, and leveraged buyout funds. Our results indicate that revenue growth is the most important investment criterion, followed by the value-added of product/service, the management team's track record, and profitability. Regarding differences across investor types, we find that family offices, growth equity funds, and leveraged buyout funds place a higher value on profitability as compared to business angels and venture capital funds. Venture capital funds, in turn, pay more attention to companies' revenue growth, business models, and current investors. With these results, our study contributes to the corporate finance literature by deepening our understanding of how different types of private equity investors make investment decisions.
Keywords
venture capital, business angels, family offices, investment criteria, conjoint analysis, LEVERAGED BUYOUTS, VALUE CREATION, PERFORMANCE, FIRMS, IMPACT, OWNERSHIP, RETURNS, FINANCE, GROWTH, SMART

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MLA
Block, Joern, et al. “Private Equity Investment Criteria : An Experimental Conjoint Analysis of Venture Capital, Business Angels, and Family Offices.” JOURNAL OF CORPORATE FINANCE, vol. 58, 2019, pp. 329–52.
APA
Block, J., Fisch, C., Vismara, S., & Andres, R. (2019). Private equity investment criteria : an experimental conjoint analysis of venture capital, business angels, and family offices. JOURNAL OF CORPORATE FINANCE, 58, 329–352.
Chicago author-date
Block, Joern, Christian Fisch, Silvio Vismara, and René Andres. 2019. “Private Equity Investment Criteria : An Experimental Conjoint Analysis of Venture Capital, Business Angels, and Family Offices.” JOURNAL OF CORPORATE FINANCE 58: 329–52.
Chicago author-date (all authors)
Block, Joern, Christian Fisch, Silvio Vismara, and René Andres. 2019. “Private Equity Investment Criteria : An Experimental Conjoint Analysis of Venture Capital, Business Angels, and Family Offices.” JOURNAL OF CORPORATE FINANCE 58: 329–352.
Vancouver
1.
Block J, Fisch C, Vismara S, Andres R. Private equity investment criteria : an experimental conjoint analysis of venture capital, business angels, and family offices. JOURNAL OF CORPORATE FINANCE. 2019;58:329–52.
IEEE
[1]
J. Block, C. Fisch, S. Vismara, and R. Andres, “Private equity investment criteria : an experimental conjoint analysis of venture capital, business angels, and family offices,” JOURNAL OF CORPORATE FINANCE, vol. 58, pp. 329–352, 2019.
@article{8651026,
  abstract     = {We use an experimental conjoint analysis to investigate the investment criteria of 749 private equity investors, distinguishing between family offices, business angels, venture capital funds, growth equity funds, and leveraged buyout funds. Our results indicate that revenue growth is the most important investment criterion, followed by the value-added of product/service, the management team's track record, and profitability. Regarding differences across investor types, we find that family offices, growth equity funds, and leveraged buyout funds place a higher value on profitability as compared to business angels and venture capital funds. Venture capital funds, in turn, pay more attention to companies' revenue growth, business models, and current investors. With these results, our study contributes to the corporate finance literature by deepening our understanding of how different types of private equity investors make investment decisions.},
  author       = {Block, Joern and Fisch, Christian and Vismara, Silvio and Andres, René},
  issn         = {0929-1199},
  journal      = {JOURNAL OF CORPORATE FINANCE},
  keywords     = {venture capital,business angels,family offices,investment criteria,conjoint analysis,LEVERAGED BUYOUTS,VALUE CREATION,PERFORMANCE,FIRMS,IMPACT,OWNERSHIP,RETURNS,FINANCE,GROWTH,SMART},
  language     = {eng},
  pages        = {329--352},
  title        = {Private equity investment criteria : an experimental conjoint analysis of venture capital, business angels, and family offices},
  url          = {http://dx.doi.org/10.1016/j.jcorpfin.2019.05.009},
  volume       = {58},
  year         = {2019},
}

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