Private Equity and Entrepreneurship

Private Equity and Entrepreneuship:
Mobilizing Capital for Fostering Firm Growth in Italy’s Southern Regions

San Domenico Palace Hotel, Taormina, 18ht July 2008

ORGANIZERS: Arturo Capasso, Giovanni Battista Dagnino, Rosario Faraci and Mario Sorrentino

The Workshop aims to call attention on the importance of private equity and venture capital as fresh-and-new sources of funding capital to trigger the growth of firms in the wide area of Southern Italy known as “Mezzogiorno”. While such firms, namely small and mediumsized firms and family managed and controlled companies, often bear vast potential to expand their market shares and operating span in their respective industries, in the area at hand they frequently suffer from financial and managerial constraints. Depending on the various stages of their lifecycle, private equitors and venture capitalists can be important drivers in the activation of firm growth in Southern Italy as they are excellent complements to other traditional forms of funding. In addition, the new rules set by the Basel 2 Agreement in Europe and the wide-reaching globalization process will induce entrepreneurs to increasingly open the equity of their firms to external investors.The workshop has immediately gathered the interest of numerous outstanding professionals from leading investment banks, consulting and law firms, business angels and academics. The Workshop will be held at the Grand Hotel San Domenico of Taormina in a breathtaking scenario overlooking the black Etna Volcano and the deep blue Mediterranean Sea.

FROM THE BLOG: What was the aim of the private equity workshop? And what will its heritage be? After concluding the intense one-day-workshop in Taormina, let us go back to the drivers of this event that attracted more than 150 people, including 21 panelists and 4 session Chairs who have intensely animated the venue.
As Co-Organizers, our primary goal was to share the knowledge of the private equity issues with entrepreneurial firms and executives, local banks, academics and graduate students. In order to accomplish the mentioned goal, the list of panelists was really oustanding. A broad spectrum of investors has illustrated the heterogeneous world of the private equity, ranging from individual investors to very specialized companies which provide money, but also managerial, organizational and networking resources in order to boost the firm’s growth process.
Some of these investors have already specifically dedicated operational activities in Southern Italy; others, while scouting for new business opportunities, are seriously considering the opportunity to diversify their portfolio investments looking at the Italian “Mezzogiorno”. In addition, academics coming from the top world’s universities, who are running special programs in private equity confirmed that, under certain conditions, Southern Italian firms are eligible to open their ownership to outside investors. And last but not least, the Ambassador of the US to Italy, ronald Spogli, said that a very friendly relationship between these two countries must be converted also into effective and stable business partnerships.
Therefore, as Co-Organizers we can say the original goal has been largely accomplished. But, in our view, the Taormina’s event needs to be only the beginning of a process. Its primary goal is certainly to revitalize the debate about the future development of the Southern Italian firms since all the main Universities located in the South of Italy have sent their representatives to Taormina in order to learn how to refuel the debate.
Now it is the turn of firms and entrepreneurs. Our firms are entrepreneurial by definition, no matter whether they operate in mature or emerging businesses. To be more competitive, they need to grow and to expand also internationally. As it happens in other parts of the world, outside investors can be the best partners in these business projects. They usually provide money and managerial and organizational resources; they introduce effective governance systems in the firms; they release the best energies to revive both the business and the corporate level strategies. Depending on the stage of the life cycle development and on the organizational size, firms may experience the support of a broad range of investors, becoming more managerial, and being more open to outside investors in their ownership structure. Are our Southern Italian entrepreneurial firms (i.e., family entrepreneurs and managers) ready to catch the wave of the momentum provided by the private equity movement? Taormina
has just launched the stone in the pond or the challenge in this very direction…