'Venture capital and its evaluation' Trends and management nbpublish.com
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Volichenko P.P. Venture capital and its evaluation

Published in journal "Trends and management", 2015-2 in rubric "Social management", pages 129-133.

Resume: The article deals with the possible use of venture capital investment in the modernization of the Russian economy development in the current crisis conditions. We explore the concept of "venture capital" and analyze the conditions of its use. This raises questions of liquidity, transparency, risk management, control and corporate governance. To study the problems of liquidity and transparency, we examine the two types of shares: shares of large enterprises and small private companies. The problem of risk venture capital investments also largely related to the size of the company. Uncertainty and investment risk is higher in the case of small private companies, rather than in the case of a large company that firmly stands on its feet. Particular attention is paid to the control and corporate governance, which is largely determined by the relationship between minority shareholders and shareholders holding large blocks of shares. We provide a definition and a brief analysis of the three main types of venture capital investments: a new venture project, refinancing and redemption. The assessment of venture capital is mainly based on the income-based approach and is usually reduced to determining the potential financial impact of venture capital investment. The article analyzes the main points related to this assessment. The method of this study is to analyze the practice of venture capital investments for the purpose of development of large and small companies, as well as key aspects of functioning said investments: liquidity, transparency, risk management, control and corporate governance. We have also analyzed the technique of using the income approach when evaluating venture capital investments. Innovative development of the Russian economy requires the use of new methods for financing projects, which allow to change the structure of the entire economy of the country relatively quickly. One such method is the use of venture capital investments. The novelty of the proposed study is that it provides not only a definition of "venture capital investment", but also analyzes the main aspects of their application: liquidity, transparency, risk management, control and corporate governance. Authors' contributions to the study of topics is also a detailed analysis of the three main types of venture capital investment - a new venture project, refinancing and redemption. In terms of assessment of new venture capital investment from a scientific point of view is the identification and analysis of the seven main points that affect the determination of their value from the perspective of the income approach.

Keywords: venture capital, liquidity, information transparency , investment risks, corporate governance, evaluation of venture capital, new venture project , venture investment, redemption, refinancing

DOI: 10.7256/2307-9118.2015.2.14321

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