Equity-Worthiness and Equity-Willingness: Key Factors In Private Equity Deals Harvard Case Solution & Analysis

Private Equity Funds (PEFs) availability provides various options for the companies to expedite the growth process, but the criteria of selecting companies for PEFs is unknown to entrepreneurs and business owners. The case provides in-depth analyses of the private equity market to the entrepreneurs looking for external capital. The authors examined a closed-end fund and a dataset of 240 pre-deal negotiations between small and medium sized Italian companies. The analyses concluded with the results that the success of a deal not only relies on the specific company’s equity-worthiness i.e., its ability to provide the desired results to its private equity investors.

The analyses found a different dimension: the specific company’s equity-willingness i.e., its inspiration to acknowledge external equity investors. Consequently, the results summarize with creating a 2x2 positioning matrix on the basis of the specific company’s equity worthiness and equity willingness., which helps the entrepreneurs understand that how private equity investors examine their firms. 

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Equity-Worthiness and Equity-Willingness: Key Factors In Private Equity Deals

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