Venture Capitalists’ Appraisal of Investment Projects: An Empirical European Study
Manigart, Sophie Wright, Mike Robbie, Ken Desbrières, Philippe De Waele, Koen
Manigart, Sophie
Wright, Mike
Robbie, Ken
Desbrières, Philippe
De Waele, Koen
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
1997-07
Journal
Entrepreneurship Theory and Practice
Book
Publication Volume
21
Publication Issue
4
Publication Begin page
29
Publication End page
44
Publication Number of pages
Collections
Abstract
The Investment appraisal and valuation process of venture capitalists includes Information gathering, the assessment of risk and required return, and the choice of a valuation method. This process is empirically studied in the United Kingdom, the Netherlands, Belgium, and France. The Importance of different information sources is equal in the four countries, except that the French venture capitalists Place more emphasis on personal references and the track record of the entrepreneur. The required return is lowest in the Netherlands and Belgium for every development stage of a company, and highest in the UK. The most widely used valuation method in the UK is the multiplication of past or future earnings with some price-earnings ratio. In the Netherlands and Belgium it is the discounting of future cash flows, and in France it is the book value of the net worth.
Research Projects
Organizational Units
Journal Issue
Keywords
3501 Accounting, Auditing and Accountability, 3502 Banking, Finance and Investment, 35 Commerce, Management, Tourism and Services