Impact of Entrepreneurial Experience among Private Equity Lead Partner Teams on Buyout Performance
Summary
This research paper empirically investigates the effect of entrepreneurial experience among Private Equity Lead Partner Teams on the operational performance of deals, measured by abnormal sales growth. The sample employed includes deal-level data on 262 leveraged buyouts between 1 st January 1997 and 31st December 2015 across 26 different countries. The findings suggest that entrepreneurial experience among Lead Partner Teams is associated with higher levels of operational performance. This validates the relevance of the relationship between entrepreneurial experience and performance, as previously established in Venture Capital and management literature, within the context of Private Equity. Further, insights into the contextual factors that may moderate this relationship are revealed. While the relationship is particularly strong among small and medium- sized enterprises and within the high-tech industry, target firms exhibiting little inorganic growth prior to the deal do not demonstrate a more pronounced relationship. This research contributes to the expanding body of literature on buyout performance and offers practical implications for aspiring professionals, educational facilities, family firms, and industry practitioners.