Venture capitalists, investment appraisal and accounting information: a comparative study of the US, UK, France, Belgium and Holland

Philippe Desbrières (), Sophie Manigart, Koen De Waele, Mike Wright, Ken Robbie, Harry Sapienza and Amy Beekman

Working Papers FARGO from Université de Bourgogne - Latec/Fargo (Research center in Finance,organizational ARchitecture and GOvernance)

Abstract: The differences between the information used for the pre-investment valuation and the valuation methods used by venture capital investors in five countries (US, UK, France, Belgium and Holland) are empirically studied. The analysis is based on postal questionnaire surveys of representative samples of senior venture capitalists in each country. Differences are found, which may be attributed to the dominant corporate governance mechanism or the level of development of the venture capital market. Between-country differences persist even after taking into account between-country differences in the relative importance of investment stages and venture capital types. Apparently similar systems and venture capital markets place varying emphases on different valuation methods, with theoretically 'correct' methods not always being preferred in practice. The findings of the study highlight the need for venture capital firms entering non-domestic markets to invest considerable effort in understanding the operation of these markets if they are to exploit fully their perceived competitive advantages and minimize the likelihood of repeating the problems experienced by venture capital entrants into foreign markets in the late 1980s.

Keywords: venture capital; investment appraisal; accounting information; corporate governance (search for similar items in EconPapers)
JEL-codes: G24 G34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-mfd and nep-rmg
Date: 1999-11
Note: article publié dans European Financial Management, vol.6, n°3, 2000, p.389-403 et dans Management Buy-outs and Venture Capital, Mike Wright et Ken Robbie (eds), Edward Elgar Publishing, 1999, p.238-262.
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Published in dans European Financial Management, vol.6, n°3, 2000, p.389-403 et dans Management Buy-outs and Venture Capital, Mike Wright et Ken Robbie (eds), Edward Elgar Publishing, 1999, p.238-262.

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Journal Article: Venture capitalists, investment appraisal and accounting information: a comparative study of the USA, UK, France, Belgium and Holland (2000)
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