Summary
Contents
Venture Capital is a form of financing provided by wealthy investors, investment banks and other financial institutions to start-ups and small- to medium-sized enterprises with strong growth potential in exchange of private equity stakes. These investors are also known as venture capitalists. With the rise of start-ups and small ventures, the market of venture capitalist and the interest of people in venture capitalism are also increasing. The valuation of the firms done by the venture capitalist at the beginning is not just a betting game. It is a thorough research done using different strategies and computing formulas. Venture Capital Investments gives a fundamental understanding of various aspects of venture capital covering the nature of investments, deal evaluation, structure, economics and fundraising. It discusses the challenges a venture capitalist faces right from raising funds to evaluating a potential deal and exit valuation. The book begins by covering the difference between the private market and the public market. Finally, it discusses fund economics and fund structure in venture capital firms. The book will be a helpful read for entrepreneurs who want to get into the shoes of a venture capitalist and understand how they valuate a firm or a start-up. It will also be an informative read for the aspiring venture capitalists who are interested to enter the venture capital market.
What does Venture Capitalist Look for in an Investment?
What does Venture Capitalist Look for in an Investment?
With the deal still in infant stage, there is no financial data available to understand the mechanics of the deal. Deeper we go into the deal, it becomes more complex to value it and the criteria becomes more subjective. In the early stage of the deal, a lot is about subjectivity. However, it still requires to be evaluated with quantitative numbers. The criteria in the early stage tend to be less about company financials and more about people running the business (promoters), past experience of the business and the market reputation of promoters. The other part of the deal is as to how attractive is the ...