 PRIVATE EQUITY: SOURCES AND USESTravis Bradford and Roy C. Smith Journal of Applied Corporate Finance, 1997, vol. 10, issue 1, 89-97 Abstract: Private equity capital is playing a large and growing role in the funding of small to medium‐sized, high‐growth businesses. Today's private equity investment typically takes the form of purchase of a minority interest in a post‐start‐up, high‐technology company followed by an IPO a few years later. A large number of such investors are scouring the markets for new investment possibilities and the competitive pressures are growing. Although private equity investors can and often do add significant value to a company, private equity is potentially expensive, in terms of both loss of ownership and loss of control over long‐term strategic decisions of the company. Owner‐managers who want to retain as much of both as possible are advised to install more formalized business procedures, expand the company's outside relationships, and become more familiar with the company's financial needs and options. These changes should reduce capital needs, reduce the costs of private equity funding, and increase negotiating leverage when dealing with large, sophisticated private capital investors. Date: 1997 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jacrfn:v:10:y:1997:i:1:p:89-97 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Applied Corporate Finance is currently edited by Donald H. Chew Jr. More articles in Journal of Applied Corporate Finance from Morgan Stanley |
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