Finish part B and C - Essay Example

As Ventura capitalists venture into CF ltd, CF ltd needs to function based on equity, and it ought to have a market large enough to validate the millions being invested in the company. Value refers to the combined elements that contribute towards creating the worthiness of a company. The venture capitalist measures the value of CF ltd through identifying certain attributes of the firm such as its assets, shares, liabilities and capital funds. That is an essential tool that aids in identifying the future expectation in company growth.

In the proposed investment, Ventura ltd assesses how important and otherwise untapped value creation occurs through the use of anticipated technology and products, and also defining the revenue stream precisely. CF ltd aims at acquiring a new drug line. Most investors know that new drug targets have large barriers to entry due to regulatory processes. As a venture capitalist works on investing their money into the company, first it needs to monitor the company’s trends in the industry and how it conducts itself in terms of adhering to regulations.

Knowledge about a crucial investment requires the investor to find established partners who are early adopters in validating a product and endorse it, allowing more sales. At what stage does the firm develop technology? Can the organisation identify and mitigate on its risks? Every business is vulnerable to risk in one way or the other; therefore, the management team needs to formulate strategies that counter the risks, which might damage the firm if it lacks mitigation policies. As CF ltd develops a new drug line, it renders itself to a number of risks; hence, it needs to employ technology that deals with any future uncertainties.

As a venture capitalist, one needs to know whether the proposed products stand a chance in the market. As an investor, the competitive edge of a new