Venture Evaluation Research Articles

The Zomato dilemma: a realistic growth trajectory and share price fair valuation?

Learning outcomes This case study is related to start-up post-listing investment analysis. Through this case study, students will be able to perform the business analysis guided by the Venture Evaluation Metric tool, perform financial analysis using the discounted cash flow methods and perform investment analysis recommendation with justifications from the business and financial analysis performed above. Case overview/synopsis This case study sets out the study of a scalable start-up, Zomato, which is a successfully listed start-up firm in India. Despite the start-up development success in the pre-listing, the firm has exhibited a continuous unprofitable finance performance in the post-listing and has further experienced a volatile share price performance, both of which have puzzled existing and potential investors. In addition, some analysts are in the opinions that the firm share price valuation have been inflated with overvaluation since in the initial public offering stage and remain traded with overvaluation in the market. Notably, considering the negative indicators mentioned above, investors are concerned about long-term sustainability of the firm business and financial performance. In the context of post-listing investment, the following questions are material to investors: What is the realistic growth trajectory for Zomato in the medium term? What is Zomato’s share fair value in the medium term? Can one see opportunities or risks ahead of investing in Zomato’s shares? What will be the investment strategy for new investors? Complexity academic level This case study is suited to bachelor’s and master’s level in business schools studying entrepreneurial finance analysis. Supplementary material Teaching notes are available for educators only. Subject code CSS 1: Accounting and finance.

Opening the black box of venture capitalists’ evaluation of entrepreneurial teams

ABSTRACT Entrepreneurial teams represent a critical evaluation criterion for venture capitalists (VCs) in the context of making investment decisions. Despite the importance of teams in VCs’ new venture evaluation, we lack an understanding of the ways in which VCs evaluate entrepreneurial teams. Using multiple case studies of 15 VCs, we identify five distinct approaches to evaluation: intuitive approach, extended intuitive approach, systematic intuitive approach, psychological rational approach, and scientific rational approach. These approaches vary in terms of the extent to which the VCs performing the evaluation develop structured procedures, incorporate objective data analysis, and spend time on data collection and analysis. Our findings reveal VCs’ heterogeneous approaches to evaluation, which feature different combinations of subjective and objective evaluations.

Playing the Business Angel: The Impact of Well-Known Business Angels on Venture Performance

People well known to the general public are increasingly acting as business angels (BAs) for young and innovative ventures worldwide. These BAs are less known for their venture evaluation skills and often do not have a professional reputation as investors. The signaling function of these well-known investors could therefore be less relevant for founders because of a limited quality assurance function. Nonetheless, a venture’s affiliation with a well-known BA may still positively alter the quality perceptions of various stakeholders because the BAs can put their reputation in other areas of life at risk, provide an easy-to-interpret and fluent cue to the general public, and improve the observability of the signal. Using a sample of more than 2,900 early-stage ventures that made a venture pitch during the Canadian, German, U.K., and U.S. versions of the reality TV show Dragons’ Den, we find that BAs’ degree of being known has a positive impact on target firm survival, web traffic, and sales. The impact of BAs’ general degree of being known is particularly strong if the congruency between the investors and the target ventures is high. These effects exist over and above potential selection effects, the professional reputation of the BA, and the greater financial resources of a funded venture. The empirical findings indicate that well-known BAs can have a positive effect on venture performance and that founders should consider not only the professional reputation of BAs but also the degree to which they are known to a general audience.

Gender Inequity in Entrepreneurship: Understanding Barriers, Boundary Conditions, and Opportunities

Achieving gender equity in entrepreneurship is a pressing societal concern. A growing number of studies have provided consistent evidence for gender disparities and barriers for female entrepreneurs. Yet, research also suggests that under certain conditions, tied to the unique features of the entrepreneurship context, there may also be a female advantage in venture evaluations and funding outcomes. In this symposium, we hone in on this burgeoning line of inquiry by bringing together four presentations that investigate when and why a female (dis)advantage emerges, and how certain features of this context help to mitigate gender bias. Based on a diverse array of methods (archival, experimental, and video metrics) and samples (angel investors, accelerators, and cofounders), the presentations highlight novel mechanisms underlying gender bias in entrepreneurship settings. Overall, this symposium aims to 1) offer actionable insights for recognizing and addressing gender bias in entrepreneurship and 2) identify new directions for gender research more broadly. Women Entrepreneurs Don’t Ask (For Enough) in the Entrepreneurial Negotiation Process? Presenter: Anyi Ma; Tulane U. The Effects of Masculinity Displays by Female Entrepreneurs on Venture Evaluation Presenter: Soojin Oh; Pennsylvania State U. Presenter: Aparna Joshi; Penn State Smeal College of Business How the Functional Titles of Male and Female Cofounders Affect Funding in Mixed-Gender Founding Team Presenter: Steven Gray; U. of Texas at Austin Presenter: Melanie Milovac; INSEAD “Gender Diversity Matching” Helps Ventures Raise Funding: Evidence from a Natural Experiment Presenter: Dana Kanze; London Business School Presenter: Alessandro Piazza; Rice U.

Will the startup succeed in your eyes? Venture evaluation of resource providers during entrepreneurs' informational signaling

Experienced founders and investors are arguably the venture community members most likely to possess needed financial and social resources for startups. We present a model of venture evaluation where entrepreneurs solicit these resource providers for needed financial and social resources. Our model addresses how resource providers' venture investment propensity influences their evaluation of entrepreneurs' informational signals and how their venture evaluation predicts their willingness to provide financial and social resources. We test our model using real-time decisions and find resource providers with founding experience (both non-investor founders and investors with founding experience) leverage their investment propensity more than non-founder investors when evaluating new ventures. In addition, our post-hoc analysis reveals that resource providers' founding experience is associated with their willingness to confer social resources. Overall, this paper focuses on the perspective of resource providers and addresses how their investment propensity, types of venturing experience, and venture evaluation influence their willingness to render resource support to new ventures.

Funding ventures similar to one of us: How status dynamics within heterogeneous groups affect venture evaluation

AbstractResearch SummaryWe examine how status dynamics in heterogeneous evaluator groups affect the evaluation of a target venture where some evaluators resemble the venture team while some do not. Using data from a funding competition in China, we theorize and empirically show that the emergence of a status hierarchy among evaluator group members based on top‐university affiliation leads non‐top‐university members to favor top‐university venture teams by (a) increasing the visibility and positive value of top‐university affiliation as a quality signal and (b) suppressing challenging questions directed at top‐university teams. By introducing small group status dynamics as an explanation for similarity bias in venture evaluation, we contribute to the literature on resource mobilization in early‐stage entrepreneurship.Managerial SummaryDespite the wide use of heterogeneous teams in venture evaluation, similarity bias—a preference for venture teams that resemble the members of an evaluation group—is still prevalent. This study shows that, under certain conditions, heterogeneous evaluation teams might not be a solution for similarity bias. We identify a group‐level source of similarity bias—the emergence of a status hierarchy among evaluators based on affiliation with top universities—which makes top‐university affiliation a more salient and positive quality signal in venture evaluation, particularly for evaluators who are not affiliated with top universities.

Experimentation, planning, and structure in early‐stage ventures: Evidence from pitch decks

AbstractResearch SummaryAn important strategic choice for early‐stage ventures is about how to learn about the market. This choice often translates into focusing on either experimentation or planning. These strategies are best supported by different structures. Hence, the fit between strategy and structure should be considered by stakeholders evaluating the venture. We hypothesize that communicating coherent combinations—experimentation and informal structure or planning and formal structure—is positively associated with evaluation and that evaluators with entrepreneurial experience are more sensitive to this coherent choice. We test this argument combining data from a university‐based venture competition and an online experiment. We find a robust positive correlation between coherent choice and evaluation. We find no clear evidence that this pattern is driven by evaluators with entrepreneurial experience.Managerial SummaryThe Lean Startup suggests that entrepreneurs should rely on experimentation rather than the more traditional planning approach. However, the value of experimentation might depend on the structure the venture adopts. We ask whether the fit between strategy and structure plays a role in the context of venture evaluation. We analyze data from a university‐based venture competition and an online experiment. We find evidence that ventures communicating coherent choices—experimentation and informal structure or planning and formal structure—tend to be evaluated better than those communicating alternative choices. However, contrary to our expectation, this pattern does not appear to be driven by evaluators with entrepreneurial experience.

The Effects of Male Entrepreneurs' Prototypical Masculine Attributes on Venture Evaluation Outcomes

While past research has unequivocally established that female entrepreneurs are penalized because they do not fit these prototypes, it has not examined how and why male entrepreneurs are advantaged by evaluators’ schema of ‘the successful entrepreneur’. Specifically, it is not known how various sub-facets of masculine prototypes are evaluated within the category of male entrepreneurs. I identify two sub-facets of prototypes in the context of technology-oriented entrepreneurship: a context-specific ‘nerd’ prototype, reflecting expectations to be a highly work-focused and intellectually stimulated male, and a cross-context ‘dominance’ prototype, reflecting stereotypic expectations that males are aggressive, forceful and confident. Drawing from male-role socialization research and prototype theory, I propose that male entrepreneurs are evaluated based upon the extent to which they possess attributes that fit both these prototypes. Testing these predictions, I use a video-metric approach to study a sample of 143 male entrepreneurs who participated in TechCrunch Battlefield San Francisco from 2012 to 2019. I examine the effects of the prototypes on two venture evaluation outcomes – selection as pitch finalists and a total amount of investment funds raised over a firm’s lifetime. The results showed that male entrepreneurs had a better chance to be selected as finalists and received greater amounts of funding when they possessed a higher level of context-specific nerd attributes; dominance among males did not have direct effects on outcomes. This main effect of nerd attributes was amplified by high levels of dominance attributes. The interaction was significant only for predicting investment funds.

How Money Talks: Speech Melody and Venture Evaluation

Investors rely on a wide range of signals to assess ventures. This paper investigates how the tone and sound of a speaker's voice (pitch level, melodic variability, speech tempo, and others) affect venture evaluation. Through an exploratory quantitative approach in three consecutive studies, we investigate the effect of speech-melody on venture funding. In study 1, we use 175 pitches from TechCrunch events to explore in the field which aspects of a speaker's voice affect funding likelihood and amount. In study 2a, we replicate our findings in an online vignette experiment in which 256 participants evaluate six venture ideas spoken by six different speakers (1,356 evaluations). Across both studies, we find that the speakers' pitch level and variability and their projected body size (smallness) significantly affect funding. In study 2b, we build on the vignette experiment's data and investigate potential mechanisms that drive our findings, specifically passion/preparedness, competence/warmth, and charisma. Charisma is the mediator which best explains our results.

The Effectiveness of Experts’ Predictions of Short-Term and Long-Term Startup survival

Startup firms are often evaluated by a group of “experts” using criteria inspired by studies that relate venture characteristics to survival. However, experts’ characteristics are not often taken into account. We examine whether the experience of experts impacts new venture evaluation, and whether more experienced experts are better able to predict new venture performance. In the short term (1 year), we find that the quality of the team predicts survival and that expertise does lead to more accurate prediction of survival. In the long term (5 years), we find that team and business model are predictors of new venture survival and that more experienced experts accurately predict new firm survival.

Analysis of Capital Budgeting In Cloud Papers Private Limited

Capital planning is the procedure where a business decides and assesses potential costs or speculations that are huge in nature. These uses and speculations incorporate undertakings, for example, constructing another plant or surges are putting resources into a long haul adventure. Periodically, a planned undertaking's lifetime money inflows and evaluated so as to decide if the potential returns created meet an adequate objective benchmark, otherwise called "speculation examination." The investigation was decided to decide the Capital Budgeting strategies utilized in venture evaluation choices among Companies recorded at the Nairobi Stock Exchange, and to discover the connection between capital planning systems and the budgetary exhibition of 47 organizations recorded in the Nairobi Stock. The reason for this investigation is to survey the capital planning writing over the previous decade. In particular, throughout the years 2004–2013, we survey works showing up in the real scholarly diaries in bookkeeping, money, and the board. Further, we audit the specific scholarly diaries in the board bookkeeping. We look at the recurrence of articles by diary and year distributed, the sort of research strategy connected, and the subject zone considered. We at that point audit the exploration discoveries by theme region.

Do Entrepreneurial Assistance Programs Create Value for Agri-Food Entrepreneurs?

AbstractThis study analyzes how agri-food Entrepreneurial Assistance Programs (EAPs) create value for entrepreneurs. Using the MSU Product Center as a unit of analysis, the effect of agri-food EAP assistance on firms’ venture evaluation, perceived legitimacy, and performance is examined. Results indicate that agri-food EAP assistance prevents untenable business ideas from launching, improves the survival of launched ventures and develops entrepreneurs’ perceived legitimacy with trading partners. Further, results imply that targeted EAPs are a viable policy approach for promoting entrepreneurial activity in the agri-food industry, and that they can be particularly well suited to assisting nascent entrepreneurs.

Zagros basin in Middle East: Along-strike variations of structure and petroleum accumulation characteristics

The Zagros basin is one of the most important petroleum-bearing foreland basins in the world, with quite different reserves of different sections along strike. To understand structural characteristics, oil and gas accumulation and the controlling factors is an important foundation when developing the oversea new venture evaluation. We take the the synthetical analysis of the along-strike (NW-SE) structural deformation differences, hydrocarbon accumulation and the controlling factors of the Diyarbakir section of Turkey, the Kirkuk section of Iraq, and Luristan, Khuzestan and Fars sections of Iran. The results show an obviously different 2P recoverable reserves of oil and gas along the strike in the Zagros basin. The Khuzestan section has the largest reserves and is dominated by Neogene reservoirs. The Zagros orogenesis forms a series of anticline structures, and the evaporite caprock forming in different periods affects the oil and gas accumulation differences in various sections of the basin. Since the Miocene, with the continuous collision between the Arabian plate and the Eurasian plate and the large-scale compression and folding occurring in the basin, the Lower Cretaceous hydrocarbon can migrates upward to the Oligocene-Miocene reservoirs along the fractures. The Cenozoic sediment is quite thick in Kirkuk and Khuzestan sections, and the Oligocene-Miocene evaporite can be a quite good regional caprock. The deformation in Fars section is strong, and the Upper Jurassic and Miocene evaporites are destroyed in different scale and the hydrocarbon mainly accumulates within the Upper Permian to Lower Triassic carbonate reservoirs. This study will provide the guidance of the new venture evaluation of the Zagros basin.

Bringing the Stages Back in: Social Network Ties and Start‐up firms’ Access to Venture Capital in China

Research summarySocial networks are believed to help start‐ups access venture capital (VC). However, the causal mechanisms remain unclear because social ties probably influence both a start‐up's likelihood of being screened for evaluation and its likelihood of being funded. Whereas prior studies conceptualize venture financing as a single‐moment event, in this article, it is theorized as a dynamic multistage process in which a screening decision precedes a funding decision. Failure to address the selection effects at each stage could lead to biased findings regarding how social ties confer advantage in venture financing. This study uses a hand‐collected dataset from China to empirically examine these arguments.Managerial summarySocial networks are believed to help start‐ups access venture capital. However, it is unclear whether this is because social ties help venture capitalists (VCs) and start‐ups overcome the problems of information asymmetry and behavioral opportunism in early‐stage financing or whether VCs are more likely to become aware of investment opportunities embedded within social networks. This study divides VC decision making into two stages: awareness generation and venture evaluation. This study finds that socially connected start‐ups have cumulative advantages in the access to venture capital, but this advantage mainly arises in the early stage where information embedded in social ties helps reduce investors’ search costs in deal screening. In contrast, social ties are a secondary consideration in the subsequent stage of VC funding decisions Copyright © 2016 Strategic Management Society.

Prospectivity evaluation with 3D CSEM

Evaluation of the prospectivity potential of hydrocarbon exploration ventures is a process of integration. Information provided by different technologies needs to be integrated into a single evaluation. This paper details a method for embedding the additional information provided by 3D Controlled Source Electromagnetic (CSEM) surveys into existing (or independently generated) prospect evaluations. Workflows are designed to leverage the primary value of the CSEM information in exploration (sensitivity to hydrocarbon volume), while minimizing the disruption and potential increase in risk associated with the adoption of a new technology. This is achieved through a focus on maintaining the independence of information sources and visibility of measurement uncertainties, along with adoption of standard performance-tracking methodologies. Previously-described workflows for embedding CSEM information in a prospect evaluation process (e.g., Buland et al., 2011; Baltar and Roth, 2013) focus either on updates to the Probability of Success (PoS), or volume assessment. In contrast, we show that the nature of the information provided by CSEM is more suited to a coupled reassessment of both risk and volumes. This generates a more robust update not prone to the shortcomings associated with existing stand-alone approaches. Workflows are illustrated with the use of realistic synthetic examples; a published prediction using the methodology is also reviewed in light of recent drilling results. When applied systematically across a CSEM-sensitive portfolio, the new information provided by 3D CSEM has the effect of polarising existing evaluations, making CSEM a valuable tool in exploration venture evaluation.

Entrepreneurship: venture initiation, management, and development

Preface Part I. Introduction to Entrepreneurship and Intrapreneurship 1. Entrepreneurship and the Entrepreneur 2. Corporate Entrepreneurship and Intrapreneurship 3. Feasibility Analysis and Venture Evaluation: Putting It All Together in a Business Plan 4. Venture Success Framework: Overall Success Requirements Part II. Venture Initiation 5. Venture Idea Sources and Opportunities: Can We Make a Value Concept Niche for the Customer? Why Buy? 6. Venture Strategic Market Targeting, Management, and Planning: Can We Sell in a Demand-Driven Strategic Opportunity Target Market? Who Buys, How Many, When, How, Where? 7. Venture Financial Analysis and Return Projections: Can We Profit? 8. Venture Financial Needs: Personal Investment and Additional Funding Needs: Can We Commit? 9. Venture Infrastructure: Product/Service and Marketing Considerations: Can We Plan the Product and Marketing Infrastructure? 10. Venture Infrastructure: Organizational and Operational Considerations: Can We Plan the Organizational and Operational Infrastructure? 11. Venture Infrastructure: Legal Considerations: Can We Plan the Legal Infrastructure? Part III. Venture Management 12. Venture Ability to Execute: Organizing, Staffing, and Management Considerations: Can We Execute the Management and Leadership of People? 13. Venture Ability to Execute: Financial Management Considerations: Can We Execute the Management and Control of Money? Part IV. Venture Development 14. Venture Growth Management and Development: Can We Grow? 15. Venture International Growth Management: Can We Grow Internationally? Epilogue Appendixes Appendix A. Definitions of International Trade Terms Appendix B. Financial Analysis Essentials

Construction of Evaluation System for Risk Investment Institutions

In this paper, by using the methods of literature analysis, theoretical analysis and contrast analysis, to the understanding of the academic literature and practice world ranking system. Through studying the data source of the original ranking and selection process, enrich the data collection approach and treatment. On the basis of theory and reality, in the evaluation system of venture capital institutions and venture capitalists in the building, we set a new system adaptability, accuracy, comparability, maneuverability to the principle of timeliness. With openness and service, data, comprehensive and balanced and the characteristics of the system balance and enrichment, we will venture capital institutions and venture capitalists evaluation system according to the four dimensional index analysis method for the weight adjustment, and eventually reach a set of indicators, more than the effect of the list.

Resolving Resource Conflicts in a Ship Repair Project

 Abstract—Managing a project is a complex task. Traditional project management tools and models such as Graphical Evaluation and Review Technique (GERT), and Venture Evaluation and Review Technique (VERT) have not adequately incorporated a number of factors which can influence the resource assignment of projects. Consequently, it is essential to use powerful tools such as Petri nets in order to provide models which are closer to real-time ones. In this paper we use Resource Assignment Petri Net to model a ship repair project. This approach enables project managers to represent and evaluate different resource assignment strategies and interactions among activities and resources. Index Terms—Coloured petri nets, project control, RAPN.

Study on Risk Assessment Method of Water Bursting Disaster in Railway Tunnel

Karst Water Bursting in Railway Tunnel is the main content of tunnel risk evaluation，there are lots of empirical factors in the actual work. Through the investigation on site, this study analyses Karst Tunnel on many respects, establishes the index system of venture evaluation on Karst Water Bursting Geological Disasters. Moreover, the concept of fuzzy information analysis is introduced to establish the fuzzy information analysis model, on the basis of information extraction of a large amount of geological disasters of Karst water bursting in Railway Tunnel, in which applied hierarchy analysis method to determine the weight of each index. Risk assessment on typical operating point shows that the risk evaluation method of fuzzy information can correctly assess the Karst water bursting disasters in railway tunnel.

THE STUDY ON VENTURE INVESTMENT EVALUATION BASED ON LINGUISTIC VARIABLES FOR CHINESE CASE / ĮMONĖS INVESTICIJŲ VERTINIMO TYRIMAS KINIJOS PAVYZDŽIU

The venture investment evaluation plays a very important role in the venture investment operation process. The goal of the paper is development of evaluation index systems and evaluation methods for venture investment. Firstly, the evaluation index systems of venture investment project are constructed in accordance with China's practical situation. Then evaluation models have been presented. In the models, operational laws of linguistic variables and distance of two linguistic variables are defined; and a single objective optimization model is constructed by maximizing deviation method to get the objective weights of indexes, and alternatives are ranked by TOPSIS and grey relation methods respectively. Finally, a numerical example is given to illustrate the evaluation procedures of two approaches. The case shows that two different approaches get the same result, but TOPSIS is simpler apparently. Santrauka Šiame straipsnyje analizuojama, kokią įtaką turi įmonės investicijų vertinimas visam investavimo procesui. Šiam tikslui pasiekti autorius pasirinko vertinimo indeksų sistemą ir investicijų vertinimo rizikos metodus. Pirmąjį pasirinktą instrumentą, t. y. vertinimo indeksų sistemą, autorius naudoja analizuodamas ir atlikdamas Kinijoje vykdomų investicinių projektų vertinimo tyrimą. Kitus tyrimo instrumentus ir matematinius metodus, tokius kaip TOPSIS, Grey metodas ir pan., taiko apibendrindamas gautus rezultatus.