Case Analysis About Venture Capital Project Evaluation Problem

As the construction of multi-level capital market in China is more and more perfect, the capitalsource channel which the enterprises seek is becoming more and more broad, especially for small andmedium-sized enterprises, innovative enterprises, in the process of its development, more and more beganto seek venture capital institutions to join, such not only can get financial support for a long time, but alsocan enjoy more additional service. Therefore, venture capital institutions play a role in the process ofenterprise development is becoming strengthened gradually.In this paper, by analyzing a traditional enterprise in the process of its development is introducedinto the case of venture capital institutions, using the knowledge, combined with the specific case, areanalyzed. First, in terms of feasibility analysis, from the business, products and technology; Capacity,production and sales; Industry and market; And the five aspects of financial feasibility analysis of thecompany. Due to the limitations of collect materials, as well as the individual information privacy, in manyways are not able to make concrete analysis. Management such as the management ability of analysis, it iscrucial for investing in a company, a management team determines the development of an enterprise.So-called investment enterprise also is actually investors, especially in VC the birthplace of the UnitedStates pay attention to the management. But because of a part of the information is privacy, this case interms of feasibility analysis focuses on a thorough analysis from the perspective of financial, other aspectsof the analysis is shown slightly short. Secondly, through the comparison and analysis of valuation methods,the final p/e ratio method is used to estimate the investment income of the case. Finally, the potential risk ofthe investment analysis one by one. Through the analysis of the case, we know that for throws theenterprise profit is very high. Therefore, also after2008ushered in the number of VC and PE have sprungup. Venture capital industry originated in the United States, after the introduction of our country, thedevelopment of small and medium-sized enterprises in China has played a great role in promoting andimproving the ownership structure, the old system for the enterprise injected fresh blood to thedevelopment of our country small and medium-sized innovative companies injection force, in this sincerelyhope that the development of venture capital industry in our country will be better and better. This article is divided into seven parts, the first part is the introduction, the main point of thebackground, based on the risk investment play a more and more important role in the process of enterprisedevelopment, also is the new way of corporate finance and has attracted much attention. And the caseanalysis the purpose and significance, analysis method and the logical structure of this article. The secondpart is about the choice of the reasonable value evaluation methods. Several evaluation methods of mainand typical analysis, including the relative valuation method of p/e ratio method, absolute valuation methodis selected in free cash flow (DCF) method, as well as the asset appraisal method and the option valuationmethod. And concluded the advantages and disadvantages of them and their applicability in the back of thecase analysis, according to the specific condition of T company choose to use the valuation method of p/eratio method, in fact, in practice, based on the limitations of other valuation methods and an operational,risk investment company to use the most basic are p/e ratio method. The third part is the summary of case,this part mainly is the overall architecture of the case to do a simple introduction, make readers in the caseof do not understand the detailed case details in case there is a whole understanding, and then in the latterpart of the case in a detailed analysis and introduction. The fourth part is the project feasibility analysis, thispart is the main part of the case analysis, respectively from the T company’s basic situation, businessproducts and technology, production capacity, production and sales, industry and market, and financialanalysis of six aspects in detail; The fifth part is the investment scheme, in all aspects of T company isanalyzed, according to the T enterprise financing plan, formulate specific investment plan, estimate ofinvestment returns. The sixth part is the reveal of the risk, the investment are introduced in this paper thepossible risk in the case, the main is listed on the business risk, industry risk and risk. When to invest in acompany should not only analyzes its feasibility, to find out the potential risks in the process of enterpriseinvestment is also very important, must be able to clearly recognize the. The seventh part is conclusion andinvestment advice, through the above analysis, investment conclusions and Suggestions. This is the maincontent of this article.Window or the place of innovation of this article is not reflected in the aspect of theory, butmanifests in terms of comprehensiveness and integrity of case analysis, the real reduction in the riskinvestment company to invest in the project analysis of the whole analysis process. In the existing literature,more is only from one aspect carries on the analysis of the cases. In reference to the case analysis of the existing risk investment, or simply put a lot of cases, each case only a brief introduction, or only one aspectof analysis cases such as the financial aspect, or only do the analysis of the investment income, but notfrom the perspective of financial analysis in detail. And financial analysis on whether to make investmentdecisions is very important, even more than other aspects of analysis, this also is not accurate investmentconclusions.