Venture Capital Investment Process
Venture capital investment process is different from normal project financing. In order to understand the venture capital investment process a review of the available literature on venture capital finance is carried out. Tyebjee and Bruno in 1984 gave a model of venture capital investment process which with some variations is commonly used presently. As per this model this activity is a five step process as follows: Deal Organization Screening Evaluation or Due Diligence Deal Structuring Post Investment Activity and Exit Deal origination: In generating a deal flow, the VC investor creates a pipeline of deals or investment opportunities that he would consider for investing in. Deal may originate in various ways. referral system, active search system, and intermediaries. Referral system is an important source of deals. Deals may be referred to VCFs by their parent organisations, trade partners, industry associations, friends etc. Another deal flow is active search through networks, Continue reading