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

Joern Block, Christian Fisch, Silvio Vismara and René Andres

Journal of Corporate Finance, 2019, vol. 58, issue C, 329-352

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 (search for similar items in EconPapers)
JEL-codes: G11 G24 G30 L26 M13 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (49)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:58:y:2019:i:c:p:329-352

DOI: 10.1016/j.jcorpfin.2019.05.009

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