Abstract: Investing is the core of private equity business and the way to develop a business idea for the investor. There are two main areas of investing: valuation and selection of opportunities and matching them with the appropriate investment vehicle. The other area is Target company valuation. The “core competence” of a private equity fund is a proper blend of strategic analysis, business planning, financial forecasting, human resources, and entrepreneur and management team assessment. Venture capital operations are distinguished by returns expected, time horizon, and minimum size of the investment. Furthermore, the chapter discusses valuation and selection procedure. Selecting investments made by venture capitalists is a complex process, because there is information asymmetry based on the interaction between impartial components, analyses with strong methodological rigor, and subjective experience and intuition. One of the valuation steps is the pre-investment phase where a series of critical factors are defined to see if and how they affect the investor. This screening is strongly influenced by the strategic orientation of the investor.
Publication Year: 2010
Publication Date: 2010-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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