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Essential skills an Management Buy-out candidate requires in order to secure equity funding

A management buy-in (MBI), wherein the control of the business passes to outside management, will typically involve private equity backing. Because this kind of venture is a higher risk to an investor than a management buy-out (MBO), there are certain qualities an MBI candidate must display in order to secure private equity finance.

It has become increasingly common for private equity firms to undertake extensive management 'due diligence' before making a buy-in investment. This will often include psychometric testing as well as referencing. So what sort of personality make-up are private equity firms looking for in their MBI candidates? Two of the most significant qualities are good leadership and good team-building skills. MBI?s tend to have a lower success rate than MBO's because new managers are unfamilar with the business, and previous managers may not have shed light on all the issues.

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