Venture Capital and Other Private Equity: A Survey

36 Pages Posted: 17 Aug 2011

See all articles by Andrew Metrick

Andrew Metrick

Yale School of Management; National Bureau of Economic Research (NBER); Yale University - Yale Program on Financial Stability

Ayako Yasuda

University of California, Davis - Graduate School of Management

Multiple version iconThere are 3 versions of this paper

Date Written: September 2011

Abstract

We review the theory and evidence on venture capital (VC) and other private equity: why professional private equity exists, what private equity managers do with their portfolio companies, what returns they earn, who earns more and why, what determines the design of contracts signed between (i) private equity managers and their portfolio companies and (ii) private equity managers and their investors (limited partners), and how/whether these contractual designs affect outcomes. Findings highlight the importance of private ownership, and information asymmetry and illiquidity associated with it, as a key explanatory factor of what makes private equity different from other asset classes.

Keywords: private equity, venture capital, buyouts, alternative assets, G2, G3, G24, G32, G34

Suggested Citation

Metrick, Andrew and Yasuda, Ayako, Venture Capital and Other Private Equity: A Survey (September 2011). European Financial Management, Vol. 17, Issue 4, pp. 619-654, 2011. Available at SSRN: https://ssrn.com/abstract=1911059 or http://dx.doi.org/10.1111/j.1468-036X.2011.00606.x

Andrew Metrick (Contact Author)

Yale School of Management ( email )

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HOME PAGE: http://faculty.som.yale.edu/andrewmetrick/

National Bureau of Economic Research (NBER) ( email )

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Yale University - Yale Program on Financial Stability

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Ayako Yasuda

University of California, Davis - Graduate School of Management ( email )

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United States
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530-752-2924 (Fax)

HOME PAGE: http://www.ayakoyasuda.com

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