Venture Capital Investing: The Complete Handbook for Investing in Private Businesses for Outstanding Profits

Chapter 2. Analysis of Management

This part of the job is so important that we have devoted both this and the next chapter to the subject. In analyzing management, the investor has one basic objective—to determine whether the management team is entrepreneurial enough to execute the business plan profitably. There are virtually hundreds of thousands of small- and medium-sized businesses in the United States today. Some have management that is entrepreneurial; most do not. But first, let’s understand the term entrepreneur.

This term has undergone a change in meaning since the late 1800s, when it was used to refer to “the director or manager of a public musical institution.” Entrepreneur derives from the French verb entreprendre (to undertake), which ...