Accurate evaluation and selection of the project is an important guarantee to realize the investment. By analyzing the investment process of private equity funds, combined with the specific situation of funded enterprises, funds will flow to those companies with prospects and potential, and finally get high returns through withdrawal. However, between investing and not investing, it is not an easy thing to choose the investment method. It is necessary to conduct due diligence on the real situation of the enterprise, analyze and judge the personal level of the manager, so as to make a correct judgment and gradually put the follow-up investment in place.

Private equity funds must fully investigate the ability of enterprise management, especially the personal situation of enterprise leaders, because the personality of small and medium-sized enterprises in the rising period is often consistent with the style of decision makers, and the personal quality and ability of leaders are very important for the growth and success of enterprises. For the due diligence report, the review committee should make dialectical judgment according to the market situation, and should give the project manager enough trust and humanistic care. In addition, cooperative investment banks, accounting firms and law firms may, for the sake of economic benefits, partner with funded enterprises, self-package, try their best to hide the disadvantages of enterprises, engage in face-saving projects and whitewash financial statements. However, these partners belong to the service industry and are in a relatively weak position. Private equity institutions should give them enough respect, fully communicate under the premise of setting a reasonable commission level, and limit the cooperation risk to a controllable range.

Another important task of investment evaluation is to sign a project contract. This is the final result of the game of balancing rights and obligations between investors and financiers, including not only the investment mode of private equity institutions, the situation and value of shares based on valuation, how to supervise and manage the invested enterprises, but also the future plans and other obligations of the invested enterprises. However, because the relevant laws of private placement are not perfect, the contract can not be completely protected by law, and the smooth performance is more based on the credibility of both parties. Moreover, the contract itself is not necessarily reciprocal. In order to achieve rapid financing, the financier may agree to extremely harsh conditions but fail to honor them, making the contract a dead letter, and the cooperation between the two parties can only end in failure, which will also increase the operating cost of private equity funds and even lead to investment losses.