ABSTRACT
Leveraged buyouts and private equity (PE)-backed buyouts are typically associated with improving firm efficiency through reducing agency costs, restructuring, cost cutting, divestments, employment reductions, etc. This chapter provides a review and synthesis of the theory and systematic empirical evidence relating to entrepreneurship in management buyouts. It shows the nature of entrepreneurship in buyouts may be contingent on the particular context, notably the vendor context, from which the deal emanated. The chapter reviews the evidence relating to entrepreneurial growth, which includes new product and market development as well as growth by acquisition, exporting, and innovation. It includes evidence on the role of PE investors in facilitating entrepreneurial activity. Further research is needed regarding the extent to which board involvement by investors in buyouts can constrain excessive entrepreneurial risk-taking by management. Research on entrepreneurial buyouts has yet to explore discovery and creation processes.
