Lessons from the Mittelstand: Growth Financing: Private Equity v. IPO

A talk with Professor Dr. Hermann Simon, author of Hidden Champions: Lessons from 500 of the World's Best Unknown Companies

The private equity model doesn’t fit well with the long-term planning horizon typical among Germany’s mostly family owned Midmarket companies. An IPO would be a better solution with shares dispersed among individual investors than concentrated in the hands of a private equity firm, which typically focuses on short-term results.

Why Is This Relevant To The Midmarket: 

The type of financing a midmarket company secures should fit with its goals. Many family-owned businesses and Small Giants should search for sources of patient capital or diffuse equity ownership rather than sell an equity stake to a private equity firm that focuses on short-term results.

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