December 19, 2012
Interviewed by: David Snow
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The Challenges of Emerging-Markets Entrepreneurship

Maria Pinelli, Global Vice Chair of  Strategic Growth Markets for EY, discusses the unique challenges that entrepreneurs face in the emerging markets today. She also discusses important ways entrepreneurs in emerging markets can prepare to partner with a private equity firm.

Maria Pinelli, Global Vice Chair of  Strategic Growth Markets for EY, discusses the unique challenges that entrepreneurs face in the emerging markets today. She also discusses important ways entrepreneurs in emerging markets can prepare to partner with a private equity firm.

Privcap: What unique challenges do entrepreneurs in emerging markets face?

 Maria Pinelli, EY: What’s difficult is—as for any business, but in particular in emerging markets—is, as they grow, how do you keep that innovative spirit? How do you keep an entrepreneurial culture? How do you continue to balance all of the growth needs against building process, infrastructure, control, systems?

And this transition is extremely painful. It’s more painful for an entrepreneur in an emerging market that has to deal with increased regulation as they start to expand outside their emerging market into a regulated market. And having the wherewithal and the patience to deal with that in a way that’s seen as positive and productive for its overall growth is a challenge, but a rewarding challenge.

Privcap: How can entrepreneurs in the emerging markets prepare themselves to partner with a private equity firm?

 Pinelli: In order for an emerging-market entrepreneur to be able to attract private equity investment—in addition to having a great business, an opportunistic market, a great management team, and the ability to show that there is future growth and a return, both for the entrepreneur and the private equity investor—they have to be able to pass due diligence. In other words, they have to be able to live up to the standards of anyone else in their private equity portfolio.

In fact, if you’re an entrepreneur looking for private equity investment, the best way to think about this is prepare yourself to go public—to be completely transparent and to know that you’ll always, always have the scrutiny of an investor, day to day, monitoring results, your ethics, your progress, and of course your return on investment.

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