PT  - JOURNAL ARTICLE
AU  - James O. Fiet
AU  - Pankaj C. Patel
TI  - Evaluating the Wealth-Creating Potentialof Business Plans
AID  - 10.3905/jpe.2006.667556
DP  - 2006 Nov 30
TA  - The Journal of Private Equity
PG  - 18--32
VI  - 10
IP  - 1
4099  - https://pm-research.com/content/10/1/18.short
4100  - https://pm-research.com/content/10/1/18.full
AB  - This research tests a novel, theoretically-based approach for evaluating and predicting business plan performance. Using hidden, but known historical cases, it successfully classified 31 out of 31 venture capital funded ventures into 3 levels of performance. These levels of performance were less than 20% ROI, between 20% and 35% ROI and greater than 35% ROI. Moreover, the results accounted for 74% of the variance above the expected ROI to investors based on the original business plan estimates. This research is important to entrepreneurs, public policy analysts and investors because it may increase the success rate of estimating commercialization efforts.TOPICS: Private equity, performance measurement, portfolio theory, statistical methods