Which criteria matter most in the evaluation of venture capital investments?

Elisabete Gomes Santana Félix () and Cesaltina Pires
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Elisabete Gomes Santana Félix: Assistant Professor, University of Évora and CEFAGE-UÉ
Authors registered in the RePEc Author Service: Elisabete Gomes Santana Félix

CEFAGE-UE Working Papers from University of Evora, CEFAGE-UE (Portugal)

Abstract: This study identifies the importance assigned to the various criteria used by the Portuguese Venture Capitalists (VCs) to evaluate and select early stage venture capital projects. The data was collected through a questionnaire answered by 20 Portuguese VCs. We use descriptive statistics techniques and non-parametric tests to identify the most valued criteria and test differences in the importance assigned to the criteria of several types of VCs and investments. The study reveals that the personality and experience of the entrepreneur and of the management team are the most valued groups of criteria. VCs with a majority of private share capital value more the personality of the entrepreneur and management team than the companies with a majority of public share capital. Additionally, the VCs that did not yet internationalize consider the personality of the entrepreneur and management team and the financial aspects, to be more important than the VCs that have already expanded abroad.

JEL-codes: G24 G32 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2011
New Economics Papers: this item is included in nep-ent and nep-ppm
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Persistent link: https://EconPapers.repec.org/RePEc:cfe:wpcefa:2011_10

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