This study employs a panel approach to investigate factors that influence the development of private equity markets over time and across countries. The empirical evidence indicates that profitable exit options are essential to the growth and development of private equity across both time and countries. The opportunity cost of investing is also found to be important. Moreover, the evidence strongly supports the hypothesis that venture capital investing and patent screening are positively related. Across countries the evidence suggests that institutional features that support property rights and contract enforcement and that facilitate information flow and expectations formation contribute to more robust private equity markets.