The profile of venture capital investments: the European context

Carmelo Reverte, María del Mar Sánchez-Hernández and Alfonso Rojo-Ramírez

International Journal of Business and Globalisation, 2016, vol. 17, issue 1, 83-110

Abstract: The aim of this paper is to deepen our understanding of the investment valuation process followed by venture capitalists (VCs) at the European level. Its contribution is two-fold. First, we shed light on the manner in which VCs estimate the investee company's value and operationalise the main variables involved in the practical application of the well-known discounted cash flow method. Second, we study whether the different degree of use of valuation methods across European countries may be explained by differences in institutional characteristics related to the underlying legal regime (i.e., English vs. German vs. French-based legal traditions). Using both univariate and multivariate analysis for a sample of 99 responses obtained from a survey addressed to VCs from the UK, France, Germany and Italy, we find that both legal systems and characteristics of VCs (i.e., experience, preferred investment stage, and main source of funds) do influence in the valuation methods used.

Keywords: venture capital investments; entrepreneurship; legal systems; Europe; discounted cash flow; DCF; investment valuation; institutional characteristics; UK; United Kingdom; France; Germany; Italy. (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.inderscience.com/link.php?id=77568 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbglo:v:17:y:2016:i:1:p:83-110

Access Statistics for this article

More articles in International Journal of Business and Globalisation from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().