Rounding and Venture capital: Difference between pages

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Rounding is a reduction in the accuracy to which numbers are displayed, in order to make them easier to understand.
(VC).


Excel has an Advanced option whether to calculate to full accuracy, or only to the displayed accuracy.
Capital supplied (by venture capitalists) as high risk equity investment with the expectation of a high return commensurate with the risk taken.


Typically, if the investment is unsuccessful, all of the investment will be lost.




== Round don't truncate ==
* VC is generally organised into venture capital funds.
It's better practice to round figures for presentation, rather than truncating them.
For example:
1.0049988 is expressed to 7 decimal places.


* VC funds invest in larger, longer-established start up businesses.
Rounding 1.0049988 off to fewer than 7 decimal places, it becomes:
*1.004999 to 6 decimal places (NOT 1.004998)
*1.00500 to 5 decimal places (not 1.00499)
*1.0050 to 4 decimal places (not 1.0049)
*1.005 to 3 decimal places (not 1.004)


If you truncate a final result instead of rounding it, it is not a strictly correct presentation.
* VC funds may also invest in turnaround, or recovery situations.
It's also important not to truncate the results of intermediate workings.


Doing that introduces errors into your final results.
* Different funds will generally have different specialist areas of expertise and investment.




== See also ==
* [[Business angel]]
* [[Crowdfunding]]
* [[Due diligence]]
* [[Entrepreneur]]
* [[Exit]]
* [[Mezzanine]]
* [[Preference shares]]
* [[Private equity]]
* [[Series A]]
* [[Unicorn]]
* [[Venture Capital Schemes]]


== Rounding errors ==
Even rounding correctly in intermediate workings introduces errors in final results.


The only way to avoid rounding errors is to keep full accuracy in the intermediate workings.
==Other resource==
[http://www.treasurers.org/node/9426 Two-fifths of SMEs that seek funding are rejected, Sally Percy, The Treasurer September 2013]


 
[[Category:The_business_context]]
== See also ==
[[Category:Corporate_finance]]
* [[Excel]]
[[Category:Investment]]
* [[CertFMM]]
[[Category:Long_term_funding]]
* [[Truncation]]

Revision as of 06:03, 15 September 2022

(VC).

Capital supplied (by venture capitalists) as high risk equity investment with the expectation of a high return commensurate with the risk taken.

Typically, if the investment is unsuccessful, all of the investment will be lost.


  • VC is generally organised into venture capital funds.
  • VC funds invest in larger, longer-established start up businesses.
  • VC funds may also invest in turnaround, or recovery situations.
  • Different funds will generally have different specialist areas of expertise and investment.


See also


Other resource

Two-fifths of SMEs that seek funding are rejected, Sally Percy, The Treasurer September 2013