Two classic equity project evaluation index systems
1. Tyebjee-Bruno Index System
In 1984, Tyebjee and Bruno used questionnaires and factor analysis to develop the first venture capital project evaluation index system in the United States. They asked 41 venture capital firms to score 90 carefully evaluated venture capital cases based on 23 pre-selected criteria. The scoring standard was 4 points (excellent), 3 points (good), 2 points (average), and 1 point (poor). Venture capital firms were asked to rate the total expected return and expected risk of each project. After factor analysis of the obtained data, basic evaluation indicators were obtained, and a venture capital evaluation model was simulated based on the impact of these indicators on expected return and risk.
This model suggests that the most significant factor influencing expected returns is market attractiveness, followed by product uniqueness. The factors influencing expected risk are management capabilities and resistance to environmental threats. (See figure below)
2. Kaplan-Stromberg Index System
In 2000, Steven N. Kaplan and Per Stromberg analyzed reports/memoranda from 20 venture capital firms on investments in 42 venture capital firms (including projects invested in from 1987 to 1999). They also collected supplementary information from the venture firms' business plans, investment contracts, and financial reports.
Their research details the specific process by which venture capitalists screen and evaluate projects, categorizing investment criteria into four main categories: attractiveness of investment opportunities (target market size, strategy, products/services/technology, and competitiveness of the venture firm), management team, investment terms, and investment environment. They describe the sub-criteria for each of these four levels and provide empirical statistics on the importance of these sub-criteria.
Previous page
Next page
Recommended News
Contact Us
Address: 15th Floor, Zhezi Building, No. 221 Wen'er Road, West Lake District, Hangzhou City, Zhejiang Province, China
Follow us