Venture Capital : What factors lie at the basis for Venture Capital investment decisions?
Introduction:Venture capital investment process is complex and different firms vary greatly in their investment practices. This has resulted in authors given several different factors that could be imperative for venture firms investment decisions. There is thus no consensus in the field of venture investing.Purpose:The purpose of this thesis is to list which factors are important for venture capital firms investment decisions in start-up firms.Method:The authors conducted structured phone interviews with seven venture capital firms in Sweden.Conclusion:The authors found the following factors to be important for venture firms investment decisions in start-up firms; Busienss plans that demonstrated the thinkings of the entrepreneur, communicate ideas, visions, product, market, competition, growth potential as well as the planned intentions with the recived funds. They also desired realistic, concreate, simple plans that explained the implementation process of the start-up firm. The second factor that was important was markets where large markets, market growth, market share, market entry and global markets were mentioned. The third factor of importance was product, in which uniqueness, simplicity, patents and time-to-market were listed. Management was the fourth factor of importance, in which sensibility, competence, technical skills, entrepreurial spirit, attitude, humbelness, determination, openness, drive, chemistry and confidence were included. The fifth factor of importamce financial embraced ROI, economioes of scale, valuation and the size of the investment. The last two important factors that the authors found to be important for the venture firms in the study were location and industry.
School:Högskolan i Jönköping
Source Type:Master's Thesis
Keywords:venture capital investment decisions start up firm
Date of Publication:03/31/2006