Small-scale private equity: Demand versus supply

Research output: Contribution to journalArticleResearchpeer-review

188 Downloads (Pure)


This paper aims to bridge the gap between theoretical dissertations on the demand and supply for equity by Australian small and medium-sized enterprises (SMEs) and the reality of the capital raising markets.


The mixed-methods approach includes questions integrated into a survey of 26,000 SMEs paired with semi-structured interviews with the CEOs or Chairs of the 15 Australian small-scale private equity (SSPE) firms.

Contrary to capital structure theory expectations, 46 per cent of Australian SMEs are interested in equity funding, despite a stated ability to acquire additional debt. The authors reveal a mismatch between supply and demand for SSPE with few SMEs able to meet private equity (PE) firms’ stringent investment criteria.

Research limitations/implications

The population of Australian SSPE firms is small and interviewee responses are qualitative and are not easily replicated.

Practical implications
To improve SSPE market liquidity, SMEs must overcome severe information asymmetry to demonstrate their quality and reduce the cost of due diligence for PE firms. One relatively easy step is for SMEs to voluntarily adopt auditable financial controls on SMEs similar to publicly traded firms.


Few studies focus on small firm equity, which is essential to economic growth and innovation. The authors use a large data set of Australian SMEs and unique informationally rich interview data on the population of Australian firms in SSPE, an industry known for its lack of transparency.
Original languageEnglish
Pages (from-to)363-380
Number of pages18
JournalAccounting Research Journal
Issue number2
Early online date30 Jan 2020
Publication statusPublished - 20 Apr 2020


Dive into the research topics of 'Small-scale private equity: Demand versus supply'. Together they form a unique fingerprint.
  • Barriers to small-scale private equity

    Dwyer, B., Duncan, K. & Southam, C., 30 Jun 2021, In: AJAF. 2021, 5, p. 50-54 5 p., 6.

    Research output: Contribution to journalArticleProfessionalpeer-review

Cite this