CapEx Funding, Capital Structure, and Revenue Targets for Entrepreneurial Financing Ventures in the Manufacturing Sector by Venture Capital Funds

Abstract

The authors examine how venture capitalists can give revenue, operating income, and net operating income– based targets to entrepreneurs’ post funding their respective ventures. They first analyze the total funding in terms of equity and debt to fund capital expenditure and then separate out comparable companies trading in the same industry, offering similar products and in the same revenue range (large cap, mid cap, or small cap). They focus on examining capital expenditure relative to revenue, operating profit, and net operating profit ratios.

TOPICS: Private equity, equity portfolio management, other real assets, accounting and ratio analysis