We thank John Doukas (editor) and an anonymous referee for helpful comments and suggestions. All errors and omissions are our own.
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Venture Capital and Other Private Equity: a Survey
Article first published online: 22 MAY 2011
DOI: 10.1111/j.1468-036X.2011.00606.x
© 2011 Blackwell Publishing Ltd
Additional Information
How to Cite
Metrick, A. and Yasuda, A. (2011), Venture Capital and Other Private Equity: a Survey. European Financial Management, 17: 619–654. doi: 10.1111/j.1468-036X.2011.00606.x
Publication History
- Issue published online: 16 AUG 2011
- Article first published online: 22 MAY 2011
- Abstract
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Keywords:
- private equity;
- venture capital;
- buyouts;
- alternative assets
- G2;
- G3;
- G24;
- G32;
- G34
Abstract
We review the theory and evidence on venture capital (VC) and other private equity: why professional private equity exists, what private equity managers do with their portfolio companies, what returns they earn, who earns more and why, what determines the design of contracts signed between (i) private equity managers and their portfolio companies and (ii) private equity managers and their investors (limited partners), and how/whether these contractual designs affect outcomes. Findings highlight the importance of private ownership, and information asymmetry and illiquidity associated with it, as a key explanatory factor of what makes private equity different from other asset classes.