umy documentsPhD PapersFINAL 7 Eval Crit used by Vent Caps - Boocock Woods.pdf (116.43 kB)
The evaluation criteria used by venture capitalists: evidence from a UK venture fund
journal contribution
posted on 2011-01-04, 16:18 authored by Grahame Boocock, Margaret WoodsGrahame Boocock and Margaret Woods are Lecturers in Banking and Finance, and
Financial Management, respectively at Loughborough University Business School,
England. The paper examines how venture fund managers select their investee
companies, by exploring the evaluation criteria and the decision making process
adopted at one UK Regional Venture Fund (henceforth referred to as the Fund). The
analysis confirms that relatively consistent evaluation criteria are applied across the
industry and corroborates previous models which suggest that venture capitalists’
decision making consists of several stages. With the benefit of access to the Fund’s
internal records, however, this paper adds to the current literature by differentiating
the evaluation criteria used at each successive stage of the decision-making
process. The paper presents a model of the Fund’s activities which demonstrates
that the relative importance attached to the evaluation criteria changes as
applications are systematically processed. Proposals have to satisfy different criteria
at each stage of the decision-making process before they receive funding. In the
vast majority of cases, applications are rejected by the fund managers. In addition,
the length of time taken by the fund managers in appraising propositions can lead to
the withdrawal of applications at an advanced stage.
History
School
- Business and Economics
Department
- Business
Citation
BOOCOCK, G. and WOODS, M., 1997. The evaluation criteria used by venture capitalists: evidence from a UK venture fund. International Small Business Journal, 16 (1), pp. 36-57.Publisher
© Sage PublicationsVersion
- AM (Accepted Manuscript)
Publication date
1997ISSN
0266-2426;1741-2870Publisher version
Language
- en