Private Equity Information Sources
Finding information about private equity-backed firms and private equity organizations is often difficult. If the firm is privately held, it is likely to attract little outside scrutiny and to disclose scant public information. Even if the firm is publicly traded, its coverage by the press may be infrequent. These problems are even more severe for private equity organizations. Private equity organizations tend to be extremely reluctant to disclose information about their successes, much less their failures.
Despite these difficulties, there are numerous occasions when it is critical to obtain information. One may be assessing a private firm as a strategic partner or a potential investment, or a private equity organization as a potential employer. This note summarizes the most useful information sources about these organizations.
Before beginning, however, it should be admitted that the most important information source is not discussed here: word-of-mouth. There is no substitute for informal "due diligence." Private equity organizations will often make 50 or even 75 calls before deciding to invest in a firm. A similar level of scrutiny may be appropriate before one accept a position or undertake a strategic alliance with a private firm.
Information about Private Firms
Business directories are an important, but rather limited, source of information about private firms. Directories such as Corporate Technology Information Service's Corporate Technology Directory, Gale Research's Ward's Directory of U.S. Public and Private Companies, and various state and industry directories provide basic information on employment, sales, industry focus, and year of formation. (Since these are based on survey responses, they are not always accurate!) But for more detailed information, one must turn to other sources.
A rich source of information is the press. Almost every firm, no matter how publicity-shy, generates some press attention. The easiest approach is to search well-cataloged databases such as ABI/Inform. Business Dateline provides full-text of regional business publications, while OneSource and PROMT cover many of the smaller trade journals and newswires. The coverage of the trade press is more comprehensive through LEXIS-NEXIS, which also includes the New York Times, several newswire services, and many smaller papers. It also may make sense to check the Wall Street Journal Index. This is available in hard copy, on CD-ROM, or online (which also includes newswire stories not printed in the Journal). It also pays to check with industry contacts as to the key trade journals that they read.
Three databases are the best sources for detailed financial information on private firms. First, Venture Economics, a unit of Securities Data Corporation (SDC), provides profiles of firms backed by venture capital and (less comprehensively) buyout funds in its VentureXpert (formerly known as the Venture Intelligence) Database. It also provides information about the amount of and the investors in each financing round. Its Joint Venture and Strategic Alliances Database summarizes corporate transactions.
A second company, VentureOne, provides more detailed profiles, including information on directors and detailed business profiles. While their coverage does not extend as far back in time as Venture Economics' and only includes venture-backed firms, the accuracy and detail of their information is generally superior. Like the Venture Economics database, VentureOne allows one to undertake extensive screening—e.g., it is possible to identify all Internet firms that received seed financing in 1997 and were based in Massachusetts. VentureOne is a professional database, with subscriptions restricted to limited partners in private equity funds and corporations making direct investments.
Finally, information on debt financing is available through Dun and Bradstreet. This includes information on both bank loans and trade credit. It is far better to discover that a firm has defaulted on previous contractual obligations before entering into a business relationship with them rather than afterwards!
Private firms sometimes make information available about themselves. It is certainly worth checking to see whether the firm has a site on the World Wide Web. This is easy to determine using the Yahoo index, as well as using the various search engines such as Alta Vista. It may also be worthwhile to contact the firm: frequently, one can get the standard kit of information sent out to the press and/or potential customers without being asked too many questions. While it may be easy to get this information, it may not always be accurate. In addition, a lot of helpful information may be available through a Web site specializing in that particular industry. For instance, Recombinant Capital--which markets a high-priced database on biotechnology-pharmaceutical alliances--has put much ancillary information on biotechnology firms on its Web site (www.recap.com).
A final source of information on private firms is the most specialized (and expensive). On occasion, one may be interested in establishing a relationship with a firm that has previously engaged in litigation. For instance, one may wish to enter into a collaborative venture with a firm that has previously litigated a key patent. Obtaining an understanding of the dispute may be important in evaluating the firm. These court records are readily available through a company called Federal Document Retrieval, which will photocopy some or all of the records.
Information about Public Firms
Public firms must file extensive information with the U.S. Securities and Exchange Commission. This makes finding out about these firms much easier. To track a company, the basic information is in the firm's initial public offering prospectus (description of the business, five years of financial results, directors and officers, principal shareholders, and financing history), and the annual 10-K filings (description of business and financial results) and proxy statements (officers and directors and principal shareholders). The most recent financial information is available in the quarterly 10-Q statements.
All these documents are available from Disclosure in hard-copy, microfiche, and (for the past eight years) on CD-ROM. Much of this information (as well as news stories) are also available in summary form on the Bloomberg machines. Since mid-1996, most companies have also made filings in electronic form, which are available (text only; pictures are not included) on the Internet at the EDGAR site (www.sec.gov).
Firms must also file "material" documents. Firms differ in how they define what is material, but generally a firm going public will file copies of its financing agreements with private equity organizations and strategic alliances with larger firms. These will often have a wealth of information not disclosed elsewhere. In many cases, a press release will describe a strategic alliance in glowing terms, but the agreement itself will reveal the alliance is much more limited in scope. It is interesting to note how often Wall Street analysts repeat what is in the press release, without bothering to check the agreement! When a firm goes public, it will typically file all material documents in a registration statement that accompanies the IPO prospectus (more technically known as a S-1 or a S-18). If the firm signs an important strategic document after it is already public, it will typically be filed in a statement known as an 8-K. These are also available from Disclosure and (since mid-1996 for most firms) at the EDGAR web site. Firms often will file repeated amendments to their registration statements, scattering key documents across their statements. This makes it very frustrating to find documents. Making life a little easier is the fact that subsequent 10-Ks will often list earlier documents filed by the firm and indicate when they were filed. LEXIS's FEDSEC/REGIS and FEDSEC/EVENTS databases provide a searchable directory of all such filings (and any exhibits contained therein) over the past five years. In general, firms make it difficult to find the most interesting items!
Analyst reports are a somewhat useful source of information. A number of analysts seem to do little more than rephrase corporate press releases, but others do careful and insightful studies. Analyst reports are one of the few public sources of financial projections for firms. Perhaps the easiest way to obtain analyst reports is contacting the head of investor relations at the firm or else the analysts directly. (Analysts covering each firm are listed in Nelson's Directory of Investment Research; and the dates of recent analyst reports are indicated in the Bloomberg news file.) Alternatively, many reports are available through the Investext database. Financial projections are available in the FirstCall and Bloomberg databases.
Several databases provide information about the financing activities of public firms. SDC publishes an annual index known as Corporate Finance: The IDD Review of Investment Banking. This also includes some large private placements. It is, however, rather awkward to search through. Disclosure’s Compact D, which provides summary reports on offerings during the past five years (screened by many criteria) is easier to use. Much more comprehensive, however, is Security Data Company's Corporate New Issues database. This not only contains more detailed information, but it can be downloaded onto a Lotus or Excel spreadsheet for easy analysis. The usage fees, however, are quite high. At least temporarily, a database very similar to SDC's is being provided by a new vendor for free on the World Wide Web (www.netresource.com/wsn).
Many publications cover the public marketplace, and highlight financial innovations of all sorts. Among the best are The Red Herring (which focuses on high-tech firms), Going Public: The IPO Reporter, Investment Dealer's Digest, and CFO. The periodicals are well worth scanning on a regular basis.
Information about Private Equity Organizations
Among the most difficult to track are the private equity organizations themselves. Most actively avoid the press. While they disclose considerable information to their limited partners in annual reports and offering memorandums, these documents are generally confidential.
To obtain information about private equity organizations, one must thus use other means. It is worth searching LEXIS-NEXIS and other databases for the occasional mentions of these firms. Both VentureOne and Venture Economics databases can be used to construct detailed profiles of various funds, but these are difficult to access or very costly.
Thus, often one is forced to rely on industry directories. Galante’s Venture Capital and Private Equity Directory profiles venture capital and private equity organizations alike; venture capital organizations only are profiled in Pratt's Guide to Venture Capital Sources. The Pratt’s guide is quite useful, however, as it has been published for several decades. This allows one to answer questions such as which partners have left at the firm and how capital under management has changed. There are several other directories that list U.S. private equity firms, such as the National Venture Capital Association's Membership Directory, but these are substantially less informative. A CD-ROM directory has been developed by Infon, from which data can be rapidly downloaded into a spreadsheet or a mail merge program.
Many venture capital organizations make some information available through the World Wide Web. The easiest way to find these is through Yahoo: the list is located at Business and Economy/Companies/Financial Services/Financing/Venture Capital. The quality, informativeness, and accuracy of these Web pages vary widely. Most buyout organizations have been more cautious about embracing this technology. A few of the many more general sites about the venture capital industry more generally are informative, though most are pretty dreary. Among the best are Price Waterhouse's (www.pw.com/vc) and Accel Partners' (www.accel.com). Additional sites are listed at my home page (www.people.hbs.edu/jlerner).
While the above sources include some buyout firms, many more are listed in the National Register Publishing Company's America's Corporate Finance Directory, McGraw-Hill’s Corporate Finance Sourcebook, SDC's Directory of Buyout Financing Sources, and the winter issue of Financial World's Corporate Finance. Small Business Investment Companies (a specialized type of private equity organization with government sponsorship) are listed in Directory of Operating Small Business Investment Companies and the National Association of Small Business Investment Companies' Membership Directory.
The names and nature of a fund's investors is potentially very valuable information. Two directories provide this information. (They are also very useful for fundraising.) Venture Economics' Directory of Private Equity Investors has better coverage; but considerably greater detail is available in Asset Alternatives' Directory of Alternative Investment Programs.
Preqin is a leading research and consultancy firm focusing on private equity, real estate, hedge funds and infrastructure. Preqin’s research covers fund performance, fundraising, fund manager profiles, fund terms and conditions and institutional investor profiles. Preqin regularly releases research reports on different areas of alternatives which are available on its website. The web address for Preqin is http://www.preqin.com/?rid=3.
Occasionally, information may be needed about the private equity industry in general. Thes fall into three broad classes: statistical analyses, legal guides, and general overviews. In addition to the publications cited below (especially the Private Equity Analyst and the Venture Capital Journal), there are several sources of statistical data. Particularly useful is VentureOne’s Annual Review and IPO Report. The annual reviews of Venture Economics and the National Venture Capital Association are also helpful. VentureOne also does a variety of other special reports: they are summarized at www.ventureone.com (and may also be ordered there). For data on LBOs, it is useful to check the November/December issue of Mergers and Acquisitions and the Security Industry Association's (less useful) Securities Industry Fact Book. The primary sources for returns data are Venture Economics' Investment Benchmarks Reports, which are prepared for venture capital, other private equity (primarily buyouts), and international funds.
A second source of information relates to the legal status of private equity activities. The most useful reference guides are Joseph Bartlett's Equity Finance, the Practicing Law Institute's annual volume Venture Capital, Michael Halloran’s Venture Capital and Public Offering Negotiation, and Jack Levin's Structuring Venture Capital, Private Equity and Entrepreneurial Transactions. (The first is the best general overview; the third the most useful in-depth analysis.)
Finally, there are more general overviews. Many collections of "war stories" by venture capitalists exist, which may make for enjoyable reading. Less entertaining but probably more helpful are the academic overviews of the industry: especially Fenn, Liang and Prowse's "The Private Equity Market: An Overview" (an earlier version, The Economics of the Private Equity Market, is available on the web at www.imdr.com/venture/preqmkt.htm) and (if you are interested in venture capital) Gompers and Lerner’s The Venture Cycle.
Information is available about European private equity firms in the European Venture Capital Association's Yearbook (formerly known as Venture Capital in Europe, this also has extensive statistical information), the Venture Capital Report Guide to Venture Capital in the U.K. and Europe, Galante’s Venture Capital and Private Equity Directory, the Fitzroy Dearborn International Directory of Venture Capital Funds, and Initiative Europe's European Buyout Review, European Buyout Monitor, and Who's Who in Risk Capital. Many national venture capital associations in Europe publish (in their native languages) detailed annual reviews and directories. For instance, the British Venture Capital Association prepares a Membership Directory and Report on Financing Activity. The European Venture Capital Association has done a series of monographs on legal aspects of private equity investing across Europe that are very helpful.
Information on Asian private equity organizations and general trends is available in the Asian Venture Capital Journal's Guide to Venture Capital in Asia. Galante’s Venture Capital and Private Equity Directory and the Fitzroy Dearborn International Directory of Venture Capital Funds have much useful information.
The final source of information is publications devoted to the private
equity industry. These include not only news stories, but also detailed
profiles of organizations and the firms in which they invest. The most useful
periodicals about the U.S. market are the Venture Capital Journal, Buyouts,
and the Private Equity Analyst. A general-interest magazine focusing on
venture capital is Upside. Detailed accounts of transactions are
contained in Private Equity Week and the quarterly Venture Edge The
specialized world of Small Business Investment Companies is covered in the NASBIC
NEWS. Asian private equity is covered in two publications, the Asian
Venture Capital Journal and the less satisfactory Venture Japan. The
European private equity scene is covered by the European Venture Capital
Journal and the much less satisfactory Start-Up. Latin American
funds are covered by the Latin American Private Equity Analyst and
Where to Find
Asian Venture Capital Journal
80 Maiden Lane
New York, NY 10038
Asian Venture Capital Journal
The Guide to Venture Capital in Asia
Aspen Law and Business
A Division of Aspen Publishers Inc.
7201 McKinney Circle
Frederic, MD 21701
(800) 447-1717 (ph)
(212) 597-0335 (fax)
Structuring Venture Capital, Private Equity and Entrepreneurial Transactions [Levin]
Venture Capital and Public Offering Negotiation [Halloran]
180 Linden Street, Suite 3
Wellesley, MA 02181
(617) 431-7353 (ph)
(617) 431-7451 (fax)
Directory of Alternative Investment Programs
Galante’s Venture Capital and Private Equity Directory
Latin American Private Equity Analyst
Private Equity Analyst
350 Main Street
Malden, MA 02148
(800) 835-6670 (ph)
(617) 388-8232 (fax)
"The Private Equity Industry: An Overview" [Fenn, Liang, and Prowse, Financial Markets, Institutions and Instruments, Vol. 6, No. 4]
499 Park Avenue
New York, NY 10022
(212) 318-2000 (ph)
(212) 980-4585 (fax)
British Venture Capital Association
12-13 Essex Street
London WC2R 3AA
British Venture Capital Association Membership Directory
British Venture Capital Association Report on Investment Activity
CFO Publishing Group
253 Summer St.
Boston, MA 02210
(617) 345-9700 (ph)
(617) 951-4090 (fax)
Corporate Technology Information Services
12 Alfred St.
Woburn, MA 01801
(800) 333-8036 (ph)
(781) 932-6335 (fax)
Corporate Technology Directory
5161 River Road
Bethesda, MD 20816
(800) 754-9690 (ph)
(301) 951-1753 (fax)
Compact D Database
U.S. Securities and Exchange Commission Filings
European Venture Capital Association
European Venture Capital Association Yearbook
Federal Document Retrieval
810 First Street, N.E., #600
Washington, DC 20002
(202) 789-2233 (ph)
(202) 371-5469 (fax)
Litigation file services
Fitzroy Dearborn Publishers
70 East Walton Street
Chicago, IL 60611
(312) 587-0131 (ph)
(312) 587-1049 (fax)
Fitzroy Dearborn International Directory of Venture Capital Funds
Financial World Partners
New York, NY 10001
(212) 594-5030 (ph)
(212) 629-0021 (fax)
Financial World’s Corporate Finance
27500 Drake Road
Farmington Hills, MI 48331-3535
(800) 877-GALE (ph)
(248) 699-8061 (fax)
Ward's Business Directory of U.S. Private and Public Companies
15600 N.E. 8th B1-161
Bellevue, WA 98008
(800) 654-6366 (ph/fax)
The Infon Venture Capital CD-ROM
Information Access Co.
362 Lakeside Drive
Foster City, CA 94404
(650) 378-5000 (ph)
Redhill RH1 1SL
European Buyout Review
European Buyout Monitor
Who's Who in Risk Capital
John Wiley & Sons, Inc.
605 Third Avenue
New York, NY 10158
(212) 850-6000 (ph)
(212) 850-6088 (fax)
Equity Finance [Bartlett]
2121 Ponce de Leon Blvd., Ste. 1020
Coral Gables, FL 33134
(305) 448-6593 (ph)
P.O. Box 933
Dayton, OH 45401
(937) 865-6800 (ph)
(937) 865-1211 (fax)
1221 Avenue of the Americas
New York, NY 10020
(212) 512-4100 (ph)
(212) 512-4105 (fax)
Corporate Finance Sourcebook
Five Cambridge Center
Cambridge, MA 02142
The Venture Cycle [Gompers and Lerner]
National Association of Small Business Investment Companies
666 11th Street, N.W.
Washington, DC 20001
(202) 628-5055 (ph)
(202) 628-5080 (fax)
National Association of Small Business Investment Companies Membership Directory
National Register Publishing
121 Chanlon Rd.
New Providence, NJ 07974
America's Corporate Finance Directory
National Venture Capital Association
1655 North Fort Myer Drive, Ste. 850
Arlington, VA 22209
(703) 524-2549 (ph)
(703) 524-3940 (fax)
National Venture Capital Association Membership Directory
National Venture Capital Association Annual Report
Nelson Information, Inc.
1 Gateway Plaza
New York, NY 10573
(914) 937-8400 (ph)
(914) 937-8908 (fax)
Nelson’s Directory of Investment Research
One Source Information Services
150 Cambridge Park Drive
Cambridge, MA 02140
(617) 441-7000 (ph)
(617) 441-7058 (fax)
OneSource Business Browser Database
Practising Law Institute
810 Seventh Ave.
New York, NY 10019
(212) 824-5710 (ph)
The Red Herring
1550 Bryant St., Ste. 450
San Francisco, CA 94103
(415) 865-2277 (ph)
(415) 865-2280 (fax)
The Red Herring
Securities Data Publishing
40 W. 57th Street, Ste. 1000
New York, NY 10019
(212) 484-4701 (ph)
(212) 732-4740 (fax)
Corporate Finance: The IDD Review of Investment Banking
Corporate New Issues Database
Directory of Buyout Financing Sources
European Venture Capital Journal
Going Public: The IPO Reporter
Investment Dealer's Digest
Joint Venture and Strategic Alliance Database
Merger and Acquisitions
Pratt's Guide to Venture Capital Sources
Private Equity Week
Venture Capital Journal
Venture Capital Yearbook
Securities Industry Association
New York, NY 10271
(212) 608-1500 (ph)
(212) 608-1604 (fax)
Securities Industry Fact Book
Thomson Financial Services
22 Pittsburgh Street
Boston, MA 02210
(617) 856-2704 (ph)
(617) 330-1986 (fax)
300 North Zeeb Road
P.O. Box 136
Ann Arbor, MI 48106
(800) 521-0600 (ph)
(734) 761-1032 (fax)
Business Dateline Database
Wall Street Journal Index
Wall Street Journal CD-ROM
United States Small Business Administration
409 Third St., S.W.
Washington, DC 20416
(202) 205-6510 (ph)
(202) 205-6959 (fax)
Directory of Operating Small Business Investment Companies
Upside Media, Inc.
2015 Pioneer Ct.
San Mateo, CA 94403
(415) 377-0950 (ph)
(415) 377-1961 (fax)
Venture Capital Report
The Magdalen Centre
Oxford Science Park
Oxford OX4 4GA
Venture Capital Report Guide to Venture Capital in the UK and Europe
Venture Economics Investor Services
Two Gateway Center, 11th Floor
Newark, NJ 07102
(973) 622-3100 (ph)
(973) 622-1421 (fax)
Directory of Private Equity Investors
Investment Benchmark Reports
VentureXpert (Venture Intelligence Database)
201 Spear St., 4th Floor
San Francisco, California 94105
(415) 357-2100 (ph)
(415) 357-2101 (fax)
VentureOne Annual Report
Erika McCaffrey and Becky Smith of Baker Library for their helpful suggestions.
Comments about this page can be sent to Josh Lerner
or to Josh Lerner; Morgan Hall; Harvard Business School; Boston, MA 02163.