Int. J. Entrepreneurship and Small Business, Vol. 11, No. 1, 2010 85 Copyright © 2010 Inderscience Enterprises Ltd. The effect of finance, knowledge and empathy gaps on the use of private equity amongst family-owned SMEs Pi-Shen Seet* Flinders Business School, Flinders University, GPO Box 2100, Adelaide SA 5001, Australia E-mail: seet0012@flinders.edu.au *Corresponding author Chris Graves, Magdalena Hadji, Andy Schnackenberg and Petter Gustafson Business School, The University of Adelaide, 5005 South Australia E-mail: chris.graves@adelaide.edu.au E-mail: magdalena.hadji@gmail.com E-mail: schnack_33@yahoo.com E-mail: petter.gustafson@gmail.com Abstract: This paper presents the findings of exploratory research into the challenges that small-to-medium-sized family-owned enterprises (SMFEs) face when engaging with the private equity (PE) sector. This study, conducted through interviews of SMFE owners, PE firms and family business professional advisors in South Australia, indicates that there are three large gaps between SMFE owners vis-à-vis the PE community: 1 a finance gap 2 a knowledge gap 3 an empathy gap. The results of this study also suggest that these gaps interact with each other to exacerbate the overall gap, and that some professional advisors were found to contribute to (rather than bridge) these gaps. This paper concludes with a revised conceptual framework model for the better understanding of the barriers to and opportunities for SMFEs to gain access to PE and some suggestions as to how professional bodies and trade associations can facilitate the process. Keywords: family firms; private equity; professional advisors; Australia. Reference to this paper should be made as follows: Seet, P-S., Graves, C., Hadji, M., Schnackenberg, A. and Gustafson, P. (2010) ‘The effect of finance, knowledge and empathy gaps on the use of private equity amongst family-owned SMEs’, Int. J. Entrepreneurship and Small Business, Vol. 11, No. 1, pp.85–104.