South African Journal of Economic and Management Sciences
On-line version ISSN 1015-8812
PORTMANN, David and MLAMBO, Chipo. Private equity and venture capital in South Africa: a comparison of project financing decisions. S. Afr. j. econ. manag. sci. [online]. 2013, vol.16, n.3, pp. 258-278. ISSN 1015-8812.
This paper investigates the manner in which private equity and venture capital firms in South Africa assess investment opportunities. The analysis was facilitated using a survey containing both Likert-scale and open-ended questions. The key findings show that both private equity and venture capital firms rate the entrepreneur or management team higher than any other criterion or consideration. Private equity firms, however, emphasise financial criteria more than venture capitalists do. There is also an observable shift in the investment activities away from start-up funding, towards later-stage deals. Risk appetite has also declined post the financial crisis.
Keywords : private equity; venture capital; investment criteria; South Africa.