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Valuing high growth potential companies: an international comparison of practices by leading venture capitalists and underwriters

Author

Listed:
  • Rémy Paliard

    (EM - EMLyon Business School)

  • Gilles Copin
  • Colin Barrow
  • Alan Richardson
  • Julian Lange
  • Benoît Leleux
  • Louise Saint-Cyr

Abstract

This paper offers the first international comparison (France, Great Britain, United States, and Canada) of the processes used by venture capitalists and underwriters in the valuations of high growth potential companies, focussing in particular on the valuation processes and techniques used and the development and dissemination of valuation-specific knowledge. Differences between two groups and their key determinants are highlighted and tested using a sample of 174 valuation cases across 42 venture capital and 40 underwriting firms. The results support a large reliance on relatively simple valuation methods supported by extensive due diligences, reinforcing the important of negotiations and deal-making in the ultimate valuation results.

Suggested Citation

  • Rémy Paliard & Gilles Copin & Colin Barrow & Alan Richardson & Julian Lange & Benoît Leleux & Louise Saint-Cyr, 2001. "Valuing high growth potential companies: an international comparison of practices by leading venture capitalists and underwriters," Post-Print hal-02311634, HAL.
    • Handle: RePEc:hal:journl:hal-02311634
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    Cited by:

    1. Pereiro, Luis E., 2006. "The practice of investment valuation in emerging markets: Evidence from Argentina," Journal of Multinational Financial Management, Elsevier, vol. 16(2), pages 160-183, April.

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