Probabilistic Methods for Financial and Marketing Informatics

Chapter 9

Venture Capital Decision Making

Start-up companies often do not have access to sufficient capital, but, if they could obtain that capital, they may have the potential for good long-term growth. If a company is perceived as having such potential, investors can hope to obtain above-average returns by investing in such companies. Money provided by investors to start-up firms is called venture capital (VC). Wealthy investors, investment banks, and other financial institutions typically provide venture capital funding. According to the National Venture Capital Association, the total venture capital invested in 1990 was $3.4 billion distributed ...