[{"doi":"10.1080/09638180.2012.741051","language":[{"iso":"eng"}],"main_file_link":[{"url":"http://www.tandfonline.com/doi/full/10.1080/09638180.2012.741051"}],"intvolume":"        22","article_type":"original","date_updated":"2026-04-09T07:59:17Z","publication_status":"published","author":[{"id":"46447","full_name":"Sievers, Sönke","first_name":"Sönke","last_name":"Sievers"},{"full_name":"Mokwa, Christopher F","first_name":"Christopher F","last_name":"Mokwa"},{"full_name":"Keienburg, Georg","last_name":"Keienburg","first_name":"Georg"}],"title":"The relevance of financial versus non-financial information for the valuation of venture capital-backed firms","year":"2013","department":[{"_id":"275"}],"keyword":["value relevance","equity valuation","venture capital","human capital","start-ups"],"type":"journal_article","date_created":"2018-10-31T11:27:42Z","abstract":[{"lang":"eng","text":"This study examines the relevance of financial and non-financial information for the valuation of venture capital (VC) investments. Based on a hand-collected data set on venture-backed start-ups in Germany, we investigate the internal due diligence documents of over 200 investment rounds. We document that balance sheet and income statement items capture as much economic content as verifiable non-financial information (e.g. team experience or the number of patents) while controlling for several deal characteristics (e.g. industry, investment round, or yearly VC fund inflows). In addition, we show that valuations based on accounting and non-accounting information yield a level of valuation accuracy that is comparable to that of publicly traded firms. Further analyses show that the industry-specific total asset multiples outperform the popular revenue multiples but lead to significantly less accurate results than those obtained from the more comprehensive valuation models. Overall, our findings might inform researchers and standard-setters of the usefulness of accounting information for investment companies and provide additional evidence to gauge the overall valuation accuracy in VC settings."}],"related_material":{"link":[{"relation":"earlier_version","url":"http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1449740"}]},"extern":"1","issue":"3","publication":"European Accounting Review (VHB-JOURQUAL 4 Ranking A)","volume":22,"user_id":"115848","publisher":"Taylor \\& Francis","_id":"5191","page":"467-511","jel":["G24","G32","M41"],"status":"public","quality_controlled":"1","citation":{"chicago":"Sievers, Sönke, Christopher F Mokwa, and Georg Keienburg. “The Relevance of Financial versus Non-Financial Information for the Valuation of Venture Capital-Backed Firms.” <i>European Accounting Review (VHB-JOURQUAL 4 Ranking A)</i> 22, no. 3 (2013): 467–511. <a href=\"https://doi.org/10.1080/09638180.2012.741051\">https://doi.org/10.1080/09638180.2012.741051</a>.","short":"S. Sievers, C.F. Mokwa, G. Keienburg, European Accounting Review (VHB-JOURQUAL 4 Ranking A) 22 (2013) 467–511.","apa":"Sievers, S., Mokwa, C. F., &#38; Keienburg, G. (2013). The relevance of financial versus non-financial information for the valuation of venture capital-backed firms. <i>European Accounting Review (VHB-JOURQUAL 4 Ranking A)</i>, <i>22</i>(3), 467–511. <a href=\"https://doi.org/10.1080/09638180.2012.741051\">https://doi.org/10.1080/09638180.2012.741051</a>","ieee":"S. Sievers, C. F. Mokwa, and G. Keienburg, “The relevance of financial versus non-financial information for the valuation of venture capital-backed firms,” <i>European Accounting Review (VHB-JOURQUAL 4 Ranking A)</i>, vol. 22, no. 3, pp. 467–511, 2013, doi: <a href=\"https://doi.org/10.1080/09638180.2012.741051\">10.1080/09638180.2012.741051</a>.","ama":"Sievers S, Mokwa CF, Keienburg G. The relevance of financial versus non-financial information for the valuation of venture capital-backed firms. <i>European Accounting Review (VHB-JOURQUAL 4 Ranking A)</i>. 2013;22(3):467-511. doi:<a href=\"https://doi.org/10.1080/09638180.2012.741051\">10.1080/09638180.2012.741051</a>","bibtex":"@article{Sievers_Mokwa_Keienburg_2013, title={The relevance of financial versus non-financial information for the valuation of venture capital-backed firms}, volume={22}, DOI={<a href=\"https://doi.org/10.1080/09638180.2012.741051\">10.1080/09638180.2012.741051</a>}, number={3}, journal={European Accounting Review (VHB-JOURQUAL 4 Ranking A)}, publisher={Taylor \\&#38; Francis}, author={Sievers, Sönke and Mokwa, Christopher F and Keienburg, Georg}, year={2013}, pages={467–511} }","mla":"Sievers, Sönke, et al. “The Relevance of Financial versus Non-Financial Information for the Valuation of Venture Capital-Backed Firms.” <i>European Accounting Review (VHB-JOURQUAL 4 Ranking A)</i>, vol. 22, no. 3, Taylor \\&#38; Francis, 2013, pp. 467–511, doi:<a href=\"https://doi.org/10.1080/09638180.2012.741051\">10.1080/09638180.2012.741051</a>."}},{"publication_status":"published","date_updated":"2022-01-06T06:54:41Z","year":"2012","title":"Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors","status":"public","jel":["G24","G32","M13","M41"],"author":[{"full_name":"Sievers, Sönke","last_name":"Sievers","first_name":"Sönke","id":"46447"},{"full_name":"Mokwa, Christopher Frederik","first_name":"Christopher Frederik","last_name":"Mokwa"}],"user_id":"46447","doi":"10.2139/ssrn.1714399","page":"42","main_file_link":[{"url":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1714399"}],"_id":"20869","language":[{"iso":"eng"}],"extern":"1","abstract":[{"lang":"eng","text":"This study provides evidence of significant biases in multi-year management forecasts by analyzing a proprietary dataset on venture-backed start-ups in Germany. We find that revenues and expenses are highly overestimated in each of the investigated one- to five-year-ahead planning periods. Furthermore, entrepreneurs underestimate one-year-ahead profit forecasts but clearly overestimate their profit forecasts for all longer-term forecast horizons. Additional analyses reveal that teams with prior management experience issue even more overestimated forecasts and misrepresent their forward-looking information. In contrast, greater asset verifiability and corporate lead investors are associated with lower levels of forecast errors. All key results hold if bias is either measured by traditionally comparing forecasts to ex-post realizations or by using a cross-sectional projection approach based on historical accounting data developed by prior research."}],"citation":{"mla":"Sievers, Sönke, and Christopher Frederik Mokwa. <i>Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors</i>. 2012, doi:<a href=\"https://doi.org/10.2139/ssrn.1714399\">10.2139/ssrn.1714399</a>.","bibtex":"@book{Sievers_Mokwa_2012, title={Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors}, DOI={<a href=\"https://doi.org/10.2139/ssrn.1714399\">10.2139/ssrn.1714399</a>}, author={Sievers, Sönke and Mokwa, Christopher Frederik}, year={2012} }","ama":"Sievers S, Mokwa CF. <i>Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors</i>.; 2012. doi:<a href=\"https://doi.org/10.2139/ssrn.1714399\">10.2139/ssrn.1714399</a>","ieee":"S. Sievers and C. F. Mokwa, <i>Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors</i>. 2012.","apa":"Sievers, S., &#38; Mokwa, C. F. (2012). <i>Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors</i>. <a href=\"https://doi.org/10.2139/ssrn.1714399\">https://doi.org/10.2139/ssrn.1714399</a>","short":"S. Sievers, C.F. Mokwa, Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors, 2012.","chicago":"Sievers, Sönke, and Christopher Frederik Mokwa. <i>Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors</i>, 2012. <a href=\"https://doi.org/10.2139/ssrn.1714399\">https://doi.org/10.2139/ssrn.1714399</a>."},"keyword":["Management forecasts","Forecasting biases","Venture-backed start-ups","Projection methods"],"type":"working_paper","date_created":"2021-01-05T11:52:51Z"},{"extern":"1","abstract":[{"lang":"eng","text":"This study shows how venture capital investors can identify potential biases in multi-year management forecasts before an investment decision and derive significantly more accurate failure predictions. By advancing a cross-sectional projection method developed by prior research and using firm-specific information in financial statements and business plans, we derive benchmarks for management revenue forecasts. With these benchmarks, we estimate forecast errors as an a priori measure of biased expectations. Using this measure for our proprietary dataset on venture-backed start-ups in Germany, we find evidence of substantial upward forecast biases. We uncover that firms with large forecast errors fail significantly more often than do less biased entrepreneurs in years following the investment. Overall, our results highlight the implications of excessive optimism and overconfidence in entrepreneurial environments and emphasize the relevance of accounting information and business plans for venture capital investment decisions."}],"citation":{"ieee":"S. Sievers and C. F. Mokwa, <i>The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments</i>. 2012.","apa":"Sievers, S., &#38; Mokwa, C. F. (2012). <i>The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments</i>. <a href=\"https://doi.org/10.2139/ssrn.2100501\">https://doi.org/10.2139/ssrn.2100501</a>","chicago":"Sievers, Sönke, and Christopher Frederik Mokwa. <i>The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments</i>, 2012. <a href=\"https://doi.org/10.2139/ssrn.2100501\">https://doi.org/10.2139/ssrn.2100501</a>.","short":"S. Sievers, C.F. Mokwa, The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments, 2012.","mla":"Sievers, Sönke, and Christopher Frederik Mokwa. <i>The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments</i>. 2012, doi:<a href=\"https://doi.org/10.2139/ssrn.2100501\">10.2139/ssrn.2100501</a>.","bibtex":"@book{Sievers_Mokwa_2012, title={The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments}, DOI={<a href=\"https://doi.org/10.2139/ssrn.2100501\">10.2139/ssrn.2100501</a>}, author={Sievers, Sönke and Mokwa, Christopher Frederik}, year={2012} }","ama":"Sievers S, Mokwa CF. <i>The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments</i>.; 2012. doi:<a href=\"https://doi.org/10.2139/ssrn.2100501\">10.2139/ssrn.2100501</a>"},"keyword":["Management forecast biases","cross-sectional projection models","venture-backed start-ups","failure prediction","overoptimism","overconfidence"],"type":"working_paper","department":[{"_id":"275"}],"date_created":"2021-01-05T11:59:50Z","publication_status":"published","date_updated":"2022-01-06T06:54:41Z","title":"The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments","status":"public","year":"2012","author":[{"full_name":"Sievers, Sönke","first_name":"Sönke","last_name":"Sievers","id":"46447"},{"full_name":"Mokwa, Christopher Frederik","first_name":"Christopher Frederik","last_name":"Mokwa"}],"jel":["G24","G32","M13","M41"],"user_id":"46447","doi":"10.2139/ssrn.2100501","main_file_link":[{"url":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2100501"}],"page":"31","_id":"20870","language":[{"iso":"eng"}]},{"doi":"10.2139/ssrn.2100501","user_id":"64756","language":[{"iso":"eng"}],"_id":"5196","date_updated":"2022-01-06T07:01:43Z","publication_status":"published","year":"2012","status":"public","title":"The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments","jel":["G24","G32","M13","M41"],"author":[{"first_name":"Christopher Frederik","last_name":"Mokwa","full_name":"Mokwa, Christopher Frederik"},{"full_name":"Sievers, Sönke","last_name":"Sievers","first_name":"Sönke"}],"type":"journal_article","keyword":["Management forecast biases","cross-sectional projection models","venture-backed start-ups","failure prediction","overoptimism","overconfidence"],"department":[{"_id":"275"}],"date_created":"2018-10-31T12:12:28Z","abstract":[{"lang":"eng","text":"This study shows how venture capital investors can identify potential biases in multi-year management forecasts before an investment decision and derive significantly more accurate failure predictions. By advancing a cross-sectional projection method developed by prior research and using firm-specific information in financial statements and business plans, we derive benchmarks for management revenue forecasts. With these benchmarks, we estimate forecast errors as an a priori measure of biased expectations. Using this measure for our proprietary dataset on venture-backed start-ups in Germany, we find evidence of substantial upward forecast biases. We uncover that firms with large forecast errors fail significantly more often than do less biased entrepreneurs in years following the investment. Overall, our results highlight the implications of excessive optimism and overconfidence in entrepreneurial environments and emphasize the relevance of accounting information and business plans for venture capital investment decisions. "}],"publication":"SSRN Electronic Journal","citation":{"apa":"Mokwa, C. F., &#38; Sievers, S. (2012). The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments. <i>SSRN Electronic Journal</i>. <a href=\"https://doi.org/10.2139/ssrn.2100501\">https://doi.org/10.2139/ssrn.2100501</a>","ieee":"C. F. Mokwa and S. Sievers, “The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments,” <i>SSRN Electronic Journal</i>, 2012.","short":"C.F. Mokwa, S. Sievers, SSRN Electronic Journal (2012).","chicago":"Mokwa, Christopher Frederik, and Sönke Sievers. “The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments.” <i>SSRN Electronic Journal</i>, 2012. <a href=\"https://doi.org/10.2139/ssrn.2100501\">https://doi.org/10.2139/ssrn.2100501</a>.","mla":"Mokwa, Christopher Frederik, and Sönke Sievers. “The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments.” <i>SSRN Electronic Journal</i>, 2012, doi:<a href=\"https://doi.org/10.2139/ssrn.2100501\">10.2139/ssrn.2100501</a>.","ama":"Mokwa CF, Sievers S. The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments. <i>SSRN Electronic Journal</i>. 2012. doi:<a href=\"https://doi.org/10.2139/ssrn.2100501\">10.2139/ssrn.2100501</a>","bibtex":"@article{Mokwa_Sievers_2012, title={The Relevance of Biases in Management Forecasts for Failure Prediction in Venture Capital Investments}, DOI={<a href=\"https://doi.org/10.2139/ssrn.2100501\">10.2139/ssrn.2100501</a>}, journal={SSRN Electronic Journal}, author={Mokwa, Christopher Frederik and Sievers, Sönke}, year={2012} }"}},{"keyword":["Management forecasts","Forecasting biases","Venture-backed start-ups","Projection methods"],"type":"journal_article","department":[{"_id":"275"}],"date_created":"2018-10-31T12:16:45Z","abstract":[{"lang":"eng","text":"This study provides evidence of significant biases in multi-year management forecasts by analyzing a proprietary dataset on venture-backed start-ups in Germany. We find that revenues and expenses are highly overestimated in each of the investigated one- to five-year-ahead planning periods. Furthermore, entrepreneurs underestimate one-year-ahead profit forecasts but clearly overestimate their profit forecasts for all longer-term forecast horizons. Additional analyses reveal that teams with prior management experience issue even more overestimated forecasts and misrepresent their forward-looking information. In contrast, greater asset verifiability and corporate lead investors are associated with lower levels of forecast errors. All key results hold if bias is either measured by traditionally comparing forecasts to ex-post realizations or by using a cross-sectional projection approach based on historical accounting data developed by prior research. "}],"publication":"SSRN Electronic Journal","citation":{"short":"C. Mokwa, S. Sievers, SSRN Electronic Journal (2012).","ama":"Mokwa C, Sievers S. Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors. <i>SSRN Electronic Journal</i>. 2012. doi:<a href=\"https://doi.org/10.2139/ssrn.1714399\">10.2139/ssrn.1714399</a>","chicago":"Mokwa, Christopher, and Sönke Sievers. “Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors.” <i>SSRN Electronic Journal</i>, 2012. <a href=\"https://doi.org/10.2139/ssrn.1714399\">https://doi.org/10.2139/ssrn.1714399</a>.","bibtex":"@article{Mokwa_Sievers_2012, title={Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors}, DOI={<a href=\"https://doi.org/10.2139/ssrn.1714399\">10.2139/ssrn.1714399</a>}, journal={SSRN Electronic Journal}, author={Mokwa, Christopher and Sievers, Sönke}, year={2012} }","apa":"Mokwa, C., &#38; Sievers, S. (2012). Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors. <i>SSRN Electronic Journal</i>. <a href=\"https://doi.org/10.2139/ssrn.1714399\">https://doi.org/10.2139/ssrn.1714399</a>","mla":"Mokwa, Christopher, and Sönke Sievers. “Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors.” <i>SSRN Electronic Journal</i>, 2012, doi:<a href=\"https://doi.org/10.2139/ssrn.1714399\">10.2139/ssrn.1714399</a>.","ieee":"C. Mokwa and S. Sievers, “Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors,” <i>SSRN Electronic Journal</i>, 2012."},"user_id":"64756","doi":"10.2139/ssrn.1714399","language":[{"iso":"eng"}],"_id":"5198","publication_status":"published","date_updated":"2022-01-06T07:01:43Z","title":"Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors","year":"2012","status":"public","author":[{"first_name":"Christopher","last_name":"Mokwa","full_name":"Mokwa, Christopher"},{"full_name":"Sievers, Sönke","first_name":"Sönke","last_name":"Sievers"}],"jel":["G24","G32","M13","M41"]}]