Private equity and venture capital in South Africa: A comparison of project financing decisions

Portmann, David and Mlambo, Chipo (2010): Private equity and venture capital in South Africa: A comparison of project financing decisions.

Abstract

This paper investigates the manner in which private equity and venture capital firms in South Africa assess investment opportunities. The analysis was facilitated using a survey containing both Likert-scale and open-ended questions. The key findings show that both private equity and venture capital firms rate the entrepreneur or management team more highly above any other criterion or consideration. Private equity firms, however, also place emphasis on financial criteria more than venture capitalists. There is also an observable shift in the investment activities away from start-up funding and towards later-stage deals. Risk appetite has also declined post the financial crisis.

• Item Type: MPRA Paper
• Language: English
• Keywords: Private equity; venture capital; investment criteria; South Africa
• Subjects: G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions; N - Economic History > N2 - Financial Markets and Institutions > N27 - Africa ; Oceania; G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance; G - Financial Economics > G2 - Financial Institutions and Services > G24 - Investment Banking ; Venture Capital ; Brokerage ; Ratings and Ratings Agencies

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