Venture Project Several Key Issues Discussed

In this paper, the author took a more in-depth exposition about project appraisal, enterprise value assessment and deal structuring, which are the three key link points for venture capital (VC). And in the process of discussing, examples were quoted to support points of the thesis as far as possible.In the preface of this paper, the author pointed out that China's venture capital industry is vary lack of research about practical operation, and it will be more necessary for China's venture capital industry to become more standardized and to adopt of the market principle.The article is divided into three chapters, each chapter took project appraisal, enterprise valuation and deal structuring as the theme for the exposition.In the first chapter, according with the internal and external researches of project appraisal index system, the author drew a proposal to establish practical, quick and effective ways of project appraisal. On the base of the actual work experience, the writer summed up some of the key factors in project appraisal, which were designed to provide quick and efficient way. In the second chapter, the author indicated that VCs should first establish a correct attitude about assessment valuation of enterprises, and discussed how to properly get a right mind-set. On this basis, citing the venture capitaloperation of the various valuation methods, including analogy,venture investment act and the internal rate of return method.The third chapter began with the concept of deal structuring, then introduced the operations process of deal structuring and the matters that needed pay attention. What the emphasis of the author was several key terms which are often used, including anti-dilution protection, ratchet adjustment, liquidation preference, co-sale rights, options and warrants and so on, along with detailed description of the calculation of the actual number. At the end of the chapter, a real financing example of a software company display the comprehensive application process of the key terms.