Recent Posts

Fair Value Accounting Improves the Quality of Portfolio Company Valuations

In a recent study, partially funded by a CIV Research Grant (2014), Kelvin Law and Nicholas G. Crain delve into the impact of fair value accounting on the valuation of individual private equity investments. The evidence gathered suggests that accounting standards matter for the valuation of private equity investments. Prior to implementation of fair value accounting, the discounted value of cash flows from realized portfolio companies exceeded their valuation by roughly 26%, yet the implementation of fair value accounting appears to eliminate nearly half of this bias, and resulted in a significant improvement in the quality of portfolio company valuations. Read more in a guest post by Nicholas G. Crain.

Read More »

Structured Exits: A Potential New Source of Funding for Life Science Startups

Structured exits are an important funding structure for new ventures. Rather than relying solely on the upside from an exit, structured exits can rely on the venture’s anticipated cash flow, or percentage of milestone payments, to repay the investor. For investors, they can offer reduced risk with the possibility of an upside; for ventures, they provide a new source of growth capital and less dilution. For life-sciences companies caught in the “death valley” between seed grants and venture capital eligibility, structured exits - carefully adapted and applied - can be a new alternative or complement to bridge loans, incubators, strategic investors, and non-dilutive funding from government sources. Read more in a guest post by Leslie Mitts, featuring Att. David Gitlin, on the CIV website.

Read More »

Managing Research in a Profit-Focused Company

Profit-focused companies need to deliver and sell their products in order to sustain themselves. How can they do it while maintaining, at the same time, bold and innovative research pathways potentially leading to future progress. Oded Cohn, Head of the IBM Israel Research Lab, explains in a short video interview to CIV.

Read More »

What Impact Can an Investor Have on a New Venture?

According to Prof. Elisa Alvarez-Garrido from Georgia State University, even ventures who know a lot about where they’re heading can still benefit much from investors. “They also need a lot of help with other things. Corporate Venture Capitalists do not only lend them the money but also help them figure out the issues about their regulation, for instance.” Prof. Alvarez-Garrido …

Read More »