A Study of Private Equity Rounds of Entrepreneurial Finance in EU: Are Buyout Funds Uninvited Guests for Startup Ecosystems?

Hiroyuki Miyamoto, Cristian Mejia and Yuya Kajikawa
Additional contact information
Hiroyuki Miyamoto: Department of Innovation Science, Tokyo Institute of Technology, Tokyo 105-0023, Japan
Cristian Mejia: Department of Innovation Science, Tokyo Institute of Technology, Tokyo 105-0023, Japan
Yuya Kajikawa: Department of Innovation Science, Tokyo Institute of Technology, Tokyo 105-0023, Japan

JRFM, 2022, vol. 15, issue 6, 1-16

Abstract: This paper studies the difference between startup investments by private equity funds (buyout funds; PE) and venture capital funds (VC). PEs, which have traditionally invested in mature companies, have been increasingly investing in later-stage startups in recent years. Based on Crunchbase’s data on EU startup investments from 2011 to the first half of 2021, we find that: (1) later-stage VC-backed startups and PE-backed startups differ in terms of the industry domain, (2) PE-backed startups tend to have higher revenue when they receive investments, and (3) VC-backed startups are more likely to exit via Initial Public Offering (IPO) and slightly less likely to exit via Mergers and Acquisitions (M&A) than PE-backed startups. These results connect previous studies on VC and PE and deepen our understanding of later-stage startup investment. It also suggests that PE invests differently than VCs and provides new added value to the startup ecosystem. In addition, it adds insights into corporate behavior in new business domain expansion.

Keywords: private equity; venture capital; entrepreneurial finance; buyout fund; startups (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/15/6/236/pdf (application/pdf)
https://www.mdpi.com/1911-8074/15/6/236/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:15:y:2022:i:6:p:236-:d:824489

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().