RT Journal Article
SR Electronic
T1 Evaluating the Wealth-Creating Potentialof Business Plans
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 18
OP 32
DO 10.3905/jpe.2006.667556
VO 10
IS 1
A1 James O. Fiet
A1 Pankaj C. Patel
YR 2006
UL https://pm-research.com/content/10/1/18.abstract
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