A preview of the “2022 Private Capital Markets Report” was presented at the NACVA’s Business Valuation & Financial Litigation Super Conference last week. The report is the result of a project at the Pepperdine University Graziadio Business School that conducts an annual survey of expected rates of return with respect to private companies. Respondents include senior lenders, asset-based lenders, mezzanine funds, private equity groups, venture capital firms, angel investors, privately held businesses, investment bankers, business brokers, limited partners, and business appraisers.
At the conference, Dr. Craig Everett, the project’s director, discussed the report and handed out the full 2022 report to attendees.
Latest ranges: Bank loans have the lowest average expected returns (a median return of 4.0% to 6.0% depending on loan size) while capital obtained from angels has the highest expected returns (ranging from a median of 33% for later-stage financing to 43% for seed money). The full report contains details on each type of funding and at various levels. The “money shot” is a grid chart showing the ranges of returns the various respondents expect at various levels.
The 2022 annual report is available for purchase if you click here.