Family businesses attract PE, VC funds

Family-promoted businesses are now attracting a large number of private equity (PE) and venture capital (VC) funds. During 2010-11, the total growth-stage investment by such funds in businesses which had family members of promoters in the management, increased by over 1,000 times to $2217 million.

Family-promoted businesses are those that are owned, managed and influenced by a family. According to reports, in India, family businesses account for about 70 per cent of the total sales and net profits of the largest 250 private sector companies. According to research firm Venture Intelligence, while in 2009-10 PE/VC investors accounted for 14 deals worth $185 million, the number of such deals in 2010-11 rose to 26.