Private Equity and Venture Capital in Italy

Bentivogli, Chiara; Carmignani, Amanda; Colle, Diana Marina Del; Giudice, Roberto Del; Gallo, Massimo; Generale, Andrea; Gervasoni, Anna; Rigon, Massimiliano; Rossi, Paola; Sette, Enrico; Szego, Bruna

doi:10.2139/ssrn.1479505

Cited by 7 publications

(5 citation statements)

References 38 publications

(24 reference statements)

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“…The business risk will decrease unless the revenues obtained are insufficient and impose a revision of strategic choices and/or of the business model. New funders will then appear: the private equity operators (AIFI, 2004;Bentivogli et al, 2009;Damodaran, 2018;Gervasoni & Sattin, 2008).…”

Section: Startups and Reputationmentioning

confidence: 99%

The Reputation Factor in the Valuation of Startups

Gonnella¹,

Talarico²

2023

IBR

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This paper analyses the relationship between corporate reputation and valuation, with a special focus on startups. Considering the most accredited scientific and professional literature regarding startup valuation, an attempt has been made to understand if and to what extent reputation can be a value driver in the estimate of startups during the first phases of their life cycle. The authors conducted a systematic literature review, which showed a modest interest in the subject on the part of the scientific community, while – on the contrary – practitioners developed ad hoc methods for valuing startups in their very early stages also considering reputational drivers. These methods are not based on the forecasting of flows and rates, but instead explain the value of the startup with a series of qualitative parameters that are explicitly identified and individually quantified/valued, acting as indicators of the value of the entity. Among the most used approaches are the Berkus Method, the Scorecard Method, and the Risk Factor Summation Method. These methods include reputational factors among qualitative parameters, that is among the value drivers. The analysis and the conclusions reached offer a conceptual contribution and identify a research path that deserves attention.

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Section: Startups and Reputationmentioning

confidence: 99%

The Reputation Factor in the Valuation of Startups

Gonnella¹,

Talarico²

2023

IBR

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“…The startup can use new sources of financing to support its growth process. The typical funders at this stage are not only venture capitalists, but more generally various private equity operators (AIFI, 2004;Gervasoni & Sattin, 2008;Bentivogli et al, 2009;Damodaran, 2012).…”

Section: Reputational Factors In Startupmentioning

confidence: 99%

The Reputation Factor in Start-up Companies: A Literature Review

Gonnella¹

2021

Proceedings of ‏The 7th International Conference on Opportunities and Challenges in Management, Economics and Accounting

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The paper analyzes the concept of reputation with particular reference to startup companies. The definition of 'reputation' that has inspired this work is that of a judgement of reliability expressed by a community about a social player based on the behaviour of that player over time. The peculiarity of this judgement is that only one or some of the members of the community have had direct knowledge of the player and their actions, and it is on this experience that they have based their personal judgements of value. The authors carried out a literature review in order to analyze the constituent factors of reputation. What emerges is that the reputational issue is configured with marked peculiarities in startups, in particular in the pre-revenue phase, when the startup has not yet matured its history. The reputation of the pre-revenue startup, in fact, since it cannot be the product of its activity, is the product of the activity and the behaviour of the founder and, more generally, of his team; in other words, the reputation of the latter becomes the reputation of the startup. Furthermore, it is a fundamental competitive lever for the startup, as it affects the ability to raise funds. Effective reputation management, therefore, cannot ignore the consideration of the life phase of the company and the nature of the subjects to which the reputational factors refer.

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“…The small average size of Italian firms makes them not eligible for PE-funded expansion or turnaround. According to Bentivogli et al (2009), surveyed market players ranked as follows the main hindrances to further PE development in the country: weak pension fund industry (which is relatively novel in Italy), faults in bankruptcy law and tax rules (both modified in recent years), financial sector rules, crowding-out behaviours from the part of public entities, poor and unstable cooperation between firms and the academy. The very small size of Italian-based funds (see below) might be an additional obstacle.…”

Section: Private Equity In Italy: Stylised Factsmentioning

confidence: 99%

“…The growth of PE operations in the Italian most financially developed area has been presumably slowed down by the lack of effective modifications, at least until the very recent years, of the main hindrances to the PE activity, most of which are institutional in nature and common to the whole country (see above). These obstacles to PE are outlined in Bentivogli et al (2009) and, as far as the early stage operations are concerned, in Bugamelli et al (2012).…”

Section: Private Equity In Italy: Stylised Factsmentioning

confidence: 99%

“…These data provide a thorough portrait of the financial operations carried out by Italian financial companies managing private equity funds. Previous studies in the field, by contrast, mainly rely on information retrieved through questionnaires submitted to the market players, or through hand-collected data sets (see, for example for Italy, Bentivogli et al 2009;Granturco and Miele 2011; for an exception, see Vacca et al 2013).…”

Section: Introductionmentioning

confidence: 99%

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Non-bank finance for firms: the role of private equity funds in Italy

Coin

Vacca

2015

Empir Econ

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Using fund-, firm-and bank-level data, we investigate the investments of the Italian private equity (PE) funds, with a focus on the north-western regions of Italy, where both the PE fund managers and their investments are heavily concentrated. The average size of the portfolios is small by international standards, and their concentration by firm has been growing after the 2008 crisis. The average duration of investments is rather short (about 3.7 years), and less than 10 % of them target firms that are both young and innovative. PE investments by Italian fund managers are still underdeveloped, relative to traditional bank credit. We find that being participated by a PE fund increases the amount of credit obtained by the target firm and the number of bank relationships, whereas it leaves the cost of credit unaffected. The effect of the PE fund participation is exclusively related to the entry of the fund in the firm's capital, as it fades away as soon as the fund exits from the capital, thus suggesting a weak signalling role of PE towards banks.Keywords Private equity · Fund portfolio · One-way fixed effects estimatorThe opinions are those of the authors and do not involve the Bank of Italy. We wish to thank Antonio Accetturo, Lugi Cannari, Alessandra Staderini and two anonymous referees for useful comments, while retaining the responsibility for residual errors.

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Private Equity and Venture Capital in Italy

Cited by 7 publications

References 38 publications

The Reputation Factor in the Valuation of Startups

The Reputation Factor in the Valuation of Startups

The Reputation Factor in Start-up Companies: A Literature Review

Non-bank finance for firms: the role of private equity funds in Italy

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