Guidelines developed by EVCA, BVCA and AFIC (the European, British and French Private Equity and Venture Capital Associations) towards investors internationally concerning valuation methodologies. Their aim is improved transparency, so that investors are better able to monitor and evaluate the performance of their investments and to make the asset class more accessible and comprehensible to new and existing investors. The guidelines have been endorsed by more than 20 European and Non-European Associations and are consistent with IFRS and US GAAP.
Glossário
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Valuation - International Valuation Guidelines
Guidelines developed by EVCA, BVCA and AFIC (the European, British and French Private Equity and Venture Capital Associations) towards investors internationally concerning valuation methodologies. Their aim is improved transparency, so that investors are better able to monitor and evaluate the performance of their investments and to make the asset class more accessible and comprehensible to new and existing investors. The guidelines have been endorsed by more than 20 European and Non-European Associations and are consistent with IFRS and US GAAP.
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Valuation methods
The policy guidelines a management team uses to value the holdings in the fund’s portfolio. More generally, valuation is an estimate of the price of an item at a given time, based on a model and comparison with the value of similar items.
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Venture capital
Professional equity co-invested with the entrepreneur to fund an early-stage (seed and start-up) or expansion venture. Offsetting the high risk the investor takes is the expectation of higher than average return on the investment.
See private equity, venture capitalist.
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Venture capitalist
The manager of private equity fund who has responsibility for the management of the fund’s investment in a particular portfolio company. In the hands-on approach (the general model for private equity investment), the venture capitalist brings in not only moneys as equity capital (ie without security/charge on assets), but also extremely valuable domain knowledge, business contacts, brand-equity, strategic advice, etc.
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Venture philanthropy
A field of philanthropic activity where private equity / venture capital business models are applied to the non-profit and charitable sectors.
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Venture purchase of quoted shares
Purchase of quoted shares with the purpose of delisting the company.
See delisting, public to private.
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Vesting
The process by which an employee is granted full ownership of conferred rights such as stock options and warrants (which then become vested rights). Rights which have not yet been vested (unvested rights) may not be sold or traded and can be forfeited.
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Vintage year
The year of fund formation and first drawdown of capital.
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Volatility
The volatility of a stock describes the extent of its variance over time.
See standard deviation.
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Vulture capitalist
Negative term for an investor who smells fast money and who is not serious about investing in companies with long-term potential.
Compare venture capitalist.