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PitchBook Analyst Note: VC-to-PE Buyouts: Adapting the PE Playbook

Q1 2020

PitchBook Analyst Note: VC-to-PE Buyouts: Adapting the PE Playbook

February 21, 2020

PitchBook Analyst Note: VC-to-PE Buyouts: Adapting the PE Playbook
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This analyst note examines the growing trend of PE buyouts of VC-backed companies and how PE firms are adapting their playbook to leverage these late-stage, quickly growing companies. The proliferation of this specific type of buyout (referred to in this note as VC-to-PE buyouts) stems from PE firms seeking earlier exposure to tech companies that are often staying private for longer. Between 2000 and 2019, the number of VC-to-PE buyouts has grown at a CAGR of 18.1%, compared to overall buyouts' growth of 9.5% over the same time period. This note also explores the specific buyer and seller considerations for this type of buyout and highlights how firms active in the space have changed their strategy to accommodate the current market.