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PRIVATE EQUITY INVESTMENT IN ENTREPRENEURIAL COMPANIES

Selection & performance

Na Dai and Andrew McAlpine

Introduction

Venture capital funds (VCs) and buyout funds (PEs) typically have very different investment objectives, styles, and geographic target areas.1 For instance, VCs often focus on small, young, and high-growth private firms, while most buyout funds focus on larger and more mature companies, among which many are already public companies. The early stage investment in Google by Kleiner Perkins Caufield & Byers is clearly a VC type investment, and the leveraged buyout of Hilton Hotels by Blackstone represents a typical buyout transaction. Over the years, however, there has been an increasing interest of PEs in entrepreneurial ...

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