Case Study For The Venture Enterprises' Evaluation

Venture capital(VC)investment in China started late but a rapid development in recent years is observed,whereas research of VC investment theorieslagged behind.Lacking of theoretical research & incomplete theory systemresults in a deficient regulation.Therefore,urgent needs of scientific & systematic theories in the area of VC investment guiding practice and application emerges.Under these circumstances,this thesis focuses on the value assessments of target company of typical VC funds,based on writer's work experience.This thesis starts from the general view of VC funds,the industry and the forecast of its development.Through the description of the significance of VC investment in Chinese capital market and the effect in the economic transition & development,it further states the importance of proper value assessment during the investment procedure of VC funds.It is followed by the discussion of value assessmentmethods in the growing VC industry.The classical methods of value assessment will be systematically introduced,stressing on the features and restrictions of the classical methods,plus the incapability of classical methods when applied to assessing target companies.Comparing to the conventional methods,a method ofassessing valuerange which is based on the combined assessment of financial forecast,industry status,developing stage,market situation and professional estimation,and assessed value which is reached by negotiation between the two parties would be discussed,according to the “invest-ability” expertise from writer's work experience.The thesis is summarized by the study of a case of the investment to EFG from writer's company,which reveals that the method provides a rational assessed value in application and is practical.With the help of this study,a systematic view of VC industry development in China would be depicted.Enhancing the rationality and scientificity of value assessment andpromoting positive effects on future practice in VC investment are the key focuses of this study.