scholarly journals Private equity and venture capital in South Africa: A comparison of project financing decisions

2013 ◽  
Vol 16 (3) ◽  
pp. 258-278 ◽  
Author(s):  
David Portmann ◽  
Chipo Mlambo
Keyword(s):  
South Africa ◽  
Venture Capital ◽  
Private Equity ◽  
Venture Capitalists ◽  
Project Financing ◽  
Financing Decisions ◽  
Start Up ◽  
Risk Appetite ◽  
Investment Opportunities ◽  
Venture Capital Firms

This paper investigates the manner in which private equity and venture capital firms in South Africa assess investment opportunities. The analysis was facilitated using a survey containing both Likert-scale and open-ended questions. The key findings show that both private equity and venture capital firms rate the entrepreneur or management team higher than any other criterion or consideration. Private equity firms, however, emphasise financial criteria more than venture capitalists do. There is also an observable shift in the investment activities away from start-up funding, towards later-stage deals. Risk appetite has also declined post the financial crisis.

scholarly journals The syndication of private equity investments in South Africa

2004 ◽  
Vol 35 (4) ◽  
pp. 39-48 ◽  
Author(s):  
N. Bent ◽  
K. Williams ◽  
E. Gilbert
Keyword(s):  
South Africa ◽  
South African ◽  
Private Equity ◽  
Start Up ◽  
The Us ◽  
Black Economic Empowerment ◽  
Venture Capital Firms ◽  
Equity Investments ◽  
Number Of Firms ◽  
Private Equity Investments

This paper examines the syndication behaviour of South African private equity and venture capital firms. Three possible rationales for syndication are tested: risk reduction through portfolio diversification (finance rationale), accessing the skills of other firms (resource-based rationale) and improved access to future investment opportunities (deal flow rationale). The finance-based rationale and deal flow rationales are found to be more important than the resource-based rationale. A number of firms additionally list Black Economic Empowerment (BEE) as an additional important reason for syndication. The reasons for syndication behaviour did not vary when small and large firms were considered separately. While firms taking part in start-up investments were more likely to syndicate, their reasons for doing so were not different from those who invest later in the investment life-cycle.While there is currently a low level of syndication of private equity investments in South Africa compared to Europe and the US, most SA firms regard syndication as beneficial and are more likely to syndicate in the future.

Rufus Rivers and Career Choices in Private Equity and Venture Capital Finance

2017 ◽  
pp. 1-21
Author(s):  
Steven Rogers ◽  
Pat Vaccaro ◽  
Scott T. Whitaker
Keyword(s):  
New York ◽  
Venture Capital ◽  
Private Equity ◽  
Career Choices ◽  
The Other ◽  
Venture Capitalists ◽  
Venture Capital Firm ◽  
Executive Search ◽  
Venture Capital Firms

Rufus Rivers, managing director and co-head of mezzanine investing at The Carlyle Group, is reviewing two employment offers he recently received. One came from RLJ Equity Partners, a private equity firm headquartered in the metropolitan Washington, D.C., area. The other came via Glocap Search, a New York-based executive search firm specializing in placing top private equity executives in premier venture capital roles. The Glocap recruiter had told Rivers that he had been selected as the leading candidate for a position with an established Boston-area venture capital firm that had several exciting investment prospects. In the next few days, Rivers needs to consider his personal and professional interests and make a decision: Should he go to Washington, go to Boston, or stay put—and on what terms?Learn about the different kinds of opportunities available to venture capitalists; Assess whether becoming venture capitalists themselves is worthwhile; Learn how venture capital firms offer positions and the terms under which joining a venture capital firm might make sense for them in their careers.

scholarly journals Innovative start-ups and young entrepreneurs: Definition of venture capital and findings from Switzerland

2017 ◽  
Vol 7 (1) ◽  
pp. 75-81
Author(s):  
Simon Zaby
Keyword(s):  
Venture Capital ◽  
Success Factors ◽  
Total Sample ◽  
Venture Capitalists ◽  
Flow Of Funds ◽  
Start Up ◽  
Capital Financing ◽  
Proper Definition ◽  
Definition Of ◽  
Start Ups

This paper aims to investigate success factors of innovative start-up firms from the perspective of young start-up managers. Which key factors did they experience before and since the foundation of their company? The experience from the quite young Swiss start-up scene pro-vides important insights to entrepreneurs and policy-makers in emerging countries that cur-rently face the necessity of building up a start-up environment. One part of the data has been collected by the author, the other part originates from the Swiss Venture Capital Database (total sample size: 306). The results show a significant role of venture capital financing for the success of innovative start-ups. Interestingly, this is to some extent because the start-ups see various additional benefits from venture capitalists involved in their firm. Thus, the findings shed new light on a proper definition of venture capital that should not solely focus on the flow of funds.

Are venture capitalists firefighters? A study of the influence and impact of venture capital firms

Technovation ◽  
1997 ◽  
Vol 17 (9) ◽  
pp. 503-532 ◽  
Author(s):  
Öystein Fredriksen ◽  
Christer Olofsson ◽  
Clas Wahlbin
Keyword(s):  
Venture Capital ◽  
Venture Capitalists ◽  
Venture Capital Firms

scholarly journals PRIVATE EQUITY MARKET IN THE ECOSYSTEM OF START-UPS AND SME SECTOR – PART 1

2020 ◽  
Vol 49 (49) ◽  
Author(s):  
Tadeusz Waściński ◽  
Anna Dudkowska ◽  
Jevgenijs Kurovs
Keyword(s):  
Venture Capital ◽  
Private Equity ◽  
Eastern European ◽  
The European Union ◽  
Investment Funds ◽  
Legal Form ◽  
Investment Companies ◽  
Start Up ◽  
Polish Economy ◽  
Start Ups

Private Equity (PE)/Venture Capital (VE) Funds cover medium and long-term transactions on the private enterprise market. They adopt a legal form of closed-ended investment funds or more and more appreciated alternative investment companies, which contribute to a development of innovativeness in the Polish economy, supporting enterprises on each level of their expansion. Over the last years, there has been an increased value of investment reported among the European PE funds. Poland’s share in the Central and Eastern European (CEE) investments has been the highest in the region and does not fall below 46%. Moreover, more than a double increase of domestic PE investments in 2017 is an opportunity for improving one of the lowest innovation indexes in the European Union. An important role in this matter also belongs to the growing power of start-up ecosystem. It is not without significance that there is a growing awareness of start-ups cooperating with funds, which is defined e.g. by a stronger position of investor or a limited possibility to negotiate the terms of investment agreements. The aim of this article is to present the PE market and its meaning in the development of young companies. Showing in the first part of the article statistics related to management of venture capital in Poland compared to Europe and the CEE will identify tendencies in development of the Polish PE market. It will also allow estimating Poland’s chances for improving its position in the innovative European ranking and increasing Poland’s competitiveness on the international level. Emphasising the importance of startup’s education in dealing with VC funds in the second part of the study will additionally highlight the essence of their cooperation in terms of professionalization of the PE market and a growth of the country’s innovativeness.

Venture capital and private equity industry in Hungary

2013 ◽  
Vol 63 (1) ◽  
pp. 23-42 ◽  
Author(s):  
Judit Karsai
Keyword(s):  
Venture Capital ◽  
Small Businesses ◽  
Private Equity ◽  
Western Europe ◽  
Stock Exchange ◽  
Debt Crisis ◽  
Early Stage ◽  
Government Interventions ◽  
Business Plans ◽  
Start Up

Hungary represents the second most developed venture capital and private equity (VC&PE) market in Central and Eastern Europe. This article is based on a detailed survey of the entire VC industry between 1989–2010. It demonstrates that while there was a relatively strong correlation between the allocation of capital to VC&PE funds and the capital flow into the Budapest Stock Exchange, the changes in investment activities were closely related to election years. Investments had been hampered primarily not by the shortage of capital, but by a lack of demand and attractive business plans. The article illustrates the different roles and approaches of global, regional and country VC&PE funds in Hungary. It points out that VC investments hardly satisfied their principal function or mission, namely to support innovative start-up and small businesses. Government interventions in the VC market proved to be ineffective as well. Similarly to the whole region, the Hungarian market profited from a transitory situation in the case of high-value PE transactions between 2007 and 2008, at the beginning of the crisis, when the investment problems in Western Europe had yet not extended to the CEE region. From 2009 onward, however, the crisis has resulted in a drop in investments despite the significant amount of uninvested capital accumulated in recent years. As to the prospects for 2013, the early-stage VC segment in Hungary is expected to flourish owing to the Jeremie funds, while the high-value buyout segment of the market will suffer from both the euro zone debt crisis and the loss of transparency in economic policy.

scholarly journals Empirical Analysis of Hungarian Firms According to Venture Capital Investment Criteria

2016 ◽  
Vol 9 (1) ◽  
pp. 16-32
Author(s):  
Judit Edit Futó
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Selection Process ◽  
Statistical Tests ◽  
Venture Capitalists ◽  
Venture Capital Investment ◽  
Capital Financing ◽  
Venture Capital Firms ◽  
Investment Process ◽  
Index Investment

Abstract Over the past decade the venture capital industry has become more and more prominent, not just on a global level, but in Hungary, too. Thanks to the JEREMIE Program a large number of new venture capital firms are located in our country, and therefore an investment wave has started. The aim of the paper is to sort micro- and small sized enterprises in terms of how appropriate is a venture capital financing. The main topic of the paper relates to the selection of firms for venture capital investment; therefore, in the first part of the study we briefly summarize a general venture capital investment process, highlighting both the selection process and the criteria used for selection. Then we propose 3 indexes (trustworthiness index, openness index, investment index), which we have created to help venture capitalists to decide whether the targeted enterprises are appropriate for them, or not. In the main part of the paper we provide a classification of micro- and small sized Hungarian firms based on my own survey, and we analyze what kind of relationship exists between the proposed indexes and the type of the classified firms. The result of the classification is that we identify four main firm types and, based on statistical tests, it can be said that there is no significant relationship between the trustworthiness index and the clusters, but that there are between the two other indexes and the clusters.

scholarly journals The evaluation of investment opportunities by South African venture capital and private equity investors

2007 ◽  
Vol 5 (1) ◽  
pp. 316-321
Author(s):  
Frederik J. Mostert ◽  
Jan Hendrik Mostert
Keyword(s):  
Empirical Study ◽  
Venture Capital ◽  
Financial Performance ◽  
South African ◽  
Private Equity ◽  
Evaluation Process ◽  
Research Paper ◽  
Empirical Results ◽  
Business Executives ◽  
Investment Opportunities

The financial performance of enterprises is relevant to all stakeholders. Business executives should therefore evaluate and select investment opportunities that will enhance the financial performance of enterprises to meet the expectations of enterprise stakeholders. The objective of this research paper focuses on the improvement of the evaluation process of investment opportunities. The empirical study included enterprises that invest venture capital and private equity as they should be experienced in the evaluation of financial and business risks of investment opportunities. Recommendations are based on the available literature and empirical results of the study and should be valuable to business executives as well as academics. The recommendations should inevitably lead to the improvement of the process according to which investment opportunities is evaluated

scholarly journals Venture Capital and Valuation of Innovative Start-ups: the Business Case of Mosaicoon

2020 ◽  
Vol 9 (2) ◽  
pp. 01-15
Author(s):  
Antonio Del Pozzo ◽  
◽  
Salvatore Loprevite ◽  
Domenico Nicolò ◽  
◽  
...  
Keyword(s):  
Venture Capital ◽  
Performance Indicators ◽  
Early Stage ◽  
Business Case ◽  
Cash Flows ◽  
Venture Capitalists ◽  
Expected Return ◽  
Continuous Growth ◽  
Start Up ◽  
Start Ups

This article analyzes the decline of one of the best well-known and promising European start-ups: Mosaic on L. t. d. The business case is emblematic of many bankruptcies caused by strategies focusing on the expectations of continuous growth of economic capital and based on unconventional performance indicators, without considering the economic-financial results and self-financing. The expectations of return on capital are extremely high and this forces one to undertake risky growth paths with very high expected return rates. This also happens in the absence of an advanced and effective capital market. Venture capitalists, even when they are public, cannot compensate for these excesses. The analysis of the case contributes to the debate on the complex topic of assessing the potentiality of start-ups and it provides useful suggestions to operators (venture capitalists, business angels, start uppers, investors, etc.) for greater prudence in considering the non-financial performance indicators. Start-ups do not produce economic results in the early stage, so they may also be valued by using non-financial metrics. However, unconventional indicators cannot be the only parameters for evaluating. When the firm is a start-up without meaningful financial information, it is more appropriate to refer to a reliable business plan drawn up on rigorous estimates of expected incomes and cash flows. Keywords: Venture capital, Start-up, Default, Performance indicators, Business case.

OurCrowd: Growing a Crowdfunding Platform in a VC World

2015 ◽  
pp. 1-11
Author(s):  
Sarit Markovich ◽  
Evan Meagher
Keyword(s):  
Venture Capital ◽  
Private Equity ◽  
Value Added ◽  
High Growth ◽  
International Markets ◽  
Value Proposition ◽  
Different Types ◽  
Incentive Problems ◽  
Venture Capital Firms ◽  
Private Investors

This case features the challenges of a startup in the crowdfunding space in 2015 as its leadership assesses potential sources of growth for the company s future. Founded in Israel in 2012 by a renowned venture capitalist, OurCrowd was a venture capital crowdfunding platform that strove to connect high-growth startups raising capital with accredited private investors from around the world. Its value proposition was to democratize an inefficient market for private equity that had historically been dominated by a small number of highly connected venture capital firms (VCs). The case asks students to put themselves in the shoes of OurCrowd s head of investor community as he prepares for a meeting with the company s board of directors to discuss potential strategies for growth: Should the company partner with the incumbent VCs it initially sought to disrupt, emphasize marketing its Portfolio Reserve fund, strive to provide its investors and investees with higher value-added services, target a broader swath of investors by aggressively marketing the platform in international markets, or attempt to go up-market and pursue increasingly larger deals with later-stage companies? Through assessing these options and discussing this case, students will learn about incentive problems in two-sided markets as well as how different types of crowdfunding platforms create value for users.

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