Venture Capitalist: The Factors of the Successful Investment

Wangshu Li, Yifei Lu () and Yueying Wan
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Wangshu Li: Wenzhou-Kean University, College of Business and Public Management
Yifei Lu: The University of Manchester, School of Natural Sciences
Yueying Wan: Dongbei University of Finance and Economics, Surrey International Institute

A chapter in Proceedings of the 2023 2nd International Conference on Economics, Smart Finance and Contemporary Trade (ESFCT 2023), 2024, pp 164-170 from Springer

Abstract: Abstract The venture capital industry has gradually received increasing attention in recent years. Making a successful investment is crucial for risk controllers. This paper mainly examines three factors that affect successful investment by reviewing papers in this field: founding team, valuation, and deal structure. In the factor of team formation, this article mentions five indicators that entrepreneurs and founding teams should consider when investing: learning ability, the execution of the founding team, personal traits of the entrepreneurs, network resources of the entrepreneurs, and integrity and complementarity. Venture capitalists with different experiences have different standards for project selection, and different economic environments can also have an impact on the selection of venture capital projects. By summarizing the relative valuation method and absolute valuation method, different valuation methods may lead to different conclusions. Therefore, in order to achieve a more accurate valuation, it is necessary to determine the needs and valuation methods of both investors. In the factor of deal structure, this paper reflects that trading structure is an important stage that connects the past and the future, and a successful trading structure can boost confidence and create advantages.

Keywords: Founding Team; Valuation; Deal Structure (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-268-2_20

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