Risks of Follow-On Investments

Risks of Follow-On Investments

For venture capital and private equity investors, the question of whether to provide capital to an existing portfolio company that needs capital for growth is often not an easy decision to make.

Read the article below and discuss how should an investor evaluate an investment in an existing portfolio company that is struggling and needs additional capital to survive. What criteria would you use to assess the risks and make a decision of either providing additional capital to that company or deny their financing request and possibly have the company run out of liquidity and cease operations?

  1. Make your initial post.
  2. Reply to one students’ post.

Requirements: 300   |   .doc file

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word limit:347