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dc.contributor.authorBaeyens, Katleen
dc.contributor.authorManigart, Sophie
dc.date.accessioned2017-12-02T14:23:35Z
dc.date.available2017-12-02T14:23:35Z
dc.date.issued2006
dc.identifier.urihttp://hdl.handle.net/20.500.12127/2017
dc.description.abstractWhile informed private equity (PE) investors screen for the most promising ventures, firms may avoid raising of PE for issues of cost and control. A critical question therefore is: which firms get PE? We consider both supply and demande side arguments to study the characteristics of a sample of 231 firms that did receive PE and compare them to those of a matched sample. Supporting the pecking order theory, we show that firms rely on PE funding when there are no alternatives, i.e.when their debt capacity is limited, due to financial and bankruptcy risk and due to important investments in intangibles. PE investors, from their side, select firms with substantial growth options. Further, firms that receive PE have grown more before the funding event than companies that did not receive PE. Keywords: financing choice, private equity JEL classification: G32
dc.description.sponsorshipWe acknowledge financial support from Ghent University (Bijzonder Onderzoeksfonds) and the Faculty of Business and Economics (Impulsfonds I). The paper benefited from discussions at the 25th Babson College-Kauffman Foundation Entrepreneurship Research Conference and workshops in Katholieke Universiteit Leuven and Erasmus University Rotterdam. We especially thank Marc Deloof, Koen Schoors, Hubert Ooghe and Mike Wright for helpful comments on earlier drafts.
dc.language.isoen
dc.subjectCorporate Finance
dc.subjectEntrepreneurship
dc.subjectLeverage
dc.subjectCapital Structure
dc.subjectLBO
dc.subjectFinancial Flexibility
dc.titleWho gets private equity? The role of debt capacity, growth and intangible assets
refterms.dateFOA2019-10-14T12:44:42Z
dc.source.issue24
dc.source.numberofpages35
vlerick.knowledgedomainAccounting & Finance
vlerick.knowledgedomainEntrepreneurship
vlerick.supervisor
vlerick.typecommWorking paper
vlerick.vlerickdepartmentA&F
dc.identifier.vperid56566
dc.identifier.vperid35884
dc.identifier.vpubid2254


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