Analysis Group Authors Discuss Private Equity’s Impact on Innovation
September 18, 2025
The private equity (PE) business model is an important driver in the lifecycle of a startup. PE investments in early-stage ventures enable operational expansion and provide better exit opportunities for initial investors. Analysis Group affiliate Yael Hochberg, Managing Principal Lauren Hunt, and Vice President Dasha Anosova examine these benefits in an article about PE’s role in powering innovation and economic growth.
PE investments can help a startup stay private for a longer time, thereby allowing its founders to retain decision-making control and ownership, the authors write. This helps avoid “some of the downsides of going public through an IPO or selling via an acquisition too early,” such as listing costs, costs of disclosure, takeover risk, and short-term performance pressure.
Relatedly, as startups stay private longer, PE firms contribute to stronger exit options for early-stage investors via secondary buyouts and strategic acquisitions. As companies successfully exit, the authors write, “financial and human capital can be recycled into new investment opportunities.”
The authors also discuss the need for a “nuanced antitrust framework” that discourages killer acquisitions while avoiding restrictive merger enforcement, which could stifle innovation.
The article, “The Role of Private Equity in the Entrepreneurial Ecosystem,” was published on the American Bar Associations Antitrust Law Section website.