Table 2
Significant Investment Criteria Differences
 

BAs’ 
Mean

VCs’ Mean

Bas’
S/D*

Vcs’
S/D*

P value

Financials used to screen for potential gains          
Perceived financial rewards (for the investor)

1.85

1.43

0.99

0.71

<0.001

Expected rate of return

2.25

1.74

1.07

0.95

<0.001

Financials to monitor the ‘operating’ business          
Low overheads

2.48

3.00

1.13

1.07

<0.001

Ability to reach break-even without further funding

2.55

2.91

1.17

1.25

 0.026

Low initial capital expenditures needed (on assets)

2.56

3.34

1.21

1.23

<0.001

Size of the investment

2.58

3.28

1.24

1.24

<0.001

Low initial cost to test the market

2.68

3.21

1.24

1.14

 0.002

Other business attributes (vital to hands-on role)          
Investor’s involvement possible (contribute skills)

2.42

2.85

1.41

1.37

 0.014

Investor’s strengths fill gaps in business

2.44

3.47

1.32

1.20

<0.001

Venture is local

2.79

3.65

1.46

1.44

<0.001

Other business attributes (misc.)          
Potential exit routes (potential liquidity)

2.88

2.19

1.34

1.02

<0.001

Investor understands the business/industry

2.88

2.43

1.45

1.08

 0.006

(Potential) co-investors present

2.93

3.37

1.51

1.53

 0.030

a The criteria were measured on a Likert Scale where 1 = very important; 5 = not important