Introduction

Abstract

For many years, buyouts in the technology sector were almost unheard of. Buyout investors as well as commercial lenders, the providers of debt capital essential to many buyouts, avoided the technology sector. Their preferred targets were in mature, stable industries such as food and retailing. Technology, so went the traditional belief among the private equity community, was too volatile, too complicated, not leveragable, without tangible assets, and finally too risky to support buyouts. In short: “LBO [leveraged buyout] firms have viewed the mixing of technology and financial risk as a recipe for disaster.”⁴