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RESEARCH PRODUCT
Venture Capitalists’ Appraisal of Investment Projects: An Empirical European Study
Koen De WaelePhilippe DesbrièresMike WrightSophie ManigartKen Robbiesubject
FinanceEconomics and EconometricsSocial venture capitalbusiness.industry05 social sciencesPre-money valuationVenture capitalCapital budgetingReturn on investment0502 economics and businessEconomics050211 marketingBusiness and International ManagementOpen-ended investment companybusiness050203 business & managementValuation (finance)description
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.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 1997-07-01 | Entrepreneurship Theory and Practice |