Original Research

Private equity and venture capital in South Africa: A comparison of project financing decisions

David Portmann, Chipo Mlambo
South African Journal of Economic and Management Sciences | Vol 16, No 3 | a354 | DOI: https://doi.org/10.4102/sajems.v16i3.354 | © 2013 David Portmann, Chipo Mlambo | This work is licensed under CC Attribution 4.0
Submitted: 21 January 2012 | Published: 02 September 2013

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David Portmann,
Chipo Mlambo, UCT Graduate School of Business

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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.


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