[IP] What Do Entrepreneurs Pay for Venture Capital Affiliation? Knowledge@Wharton April 21-May 4, 2004
What Do Entrepreneurs Pay for Venture Capital Affiliation?
A software services company looking for an early-stage round of investment
from venture capital funds gets four offers. Two of them value the company
at $10 million, one at $12.5 million and one at $20 million. Any of the
offers would net the software company approximately $8 million in cash
inflows. It would seem to be a no-brainer. Accept the investment at the
highest so-called "pre-money" valuation. So why did the company pick the
$12.5 million offer? It's a question that Wharton management professor
David Hsu explores in a recent paper measuring the impact of "intangibles"
- such as reputation and access to networks - on VC relationships with
entrepreneurs.
http://knowledge.wharton.upenn.edu/article/976.cfm
-------------------------------------
You are subscribed as roessler@xxxxxxxxxxxxxxxxxx
To manage your subscription, go to
http://v2.listbox.com/member/?listname=ip
Archives at: http://www.interesting-people.org/archives/interesting-people/