Prediction of Equity Values for Venture Capital Backed Firms
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چکیده
This study investigates the predictability of firm values for venture capital-backed firms. Having insights into the internal documents of more than 300 venture capitalists, we derive three common categories of firm value drivers: team characteristics, firm and market characteristics, and accounting information. Based on these value drivers, we provide a regression based valuation approach, which allows to assess valuation precision by comparing estimated firm values to realized values. The results suggest that venture capital-backed firms may be valued as accurately as publicly traded firms. These findings may help entrepreneurs and investors to obtain an indicative value estimate for their firms. JEL classification: G24, G32
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