The study of a company is not the study of a dead body. It is not similar to an autopsy. It is the study of things and relationships. They are very much alive and constantly changing. It is the study of something very much alive which falls or breaks up unless constantly pushed ahead or improved. It is the study of men and men’ work, of their hopes and aspirations. The study of the tools and methods they selected and built. It is the study of conceptions and creations -imagination – hopes and disillusions.

– Georges Doriot

founding father of venture capital and private equity investing

What Prof Doriot described, in his misleadingly simple phrase as “the study of a company,” is really the essence of what private investment is all about. Companies are hardly cadavers. Rather, they are complex living networks of people, capital, products, and markets. Likewise, private investment is not a simple transaction of buyer meet seller. It is the beginning of a relationship – one that requires nurturing, discipline, sharing, and accountability.

If the relationship works, the rewards are rich. If it does not, the company suffers and eventually, so does the private investment firm, because it shares responsibility for the failure, especially in the eyes of the investor who supports the fund and expect success.