Book description
The definitive guide to demystifying the venture capital business
The Business of Venture Capital, Second Edition covers the entire spectrum of this field, from raising funds and structuring investments to assessing exit pathways. Written by a practitioner for practitioners, the book provides the necessary breadth and depth, simplifies the jargon, and balances the analytical logic with experiential wisdom. Starting with a Foreword by Mark Heesen, President, National Venture Capital Association (NVCA), this important guide includes insights and perspectives from leading experts.
Covers the process of raising the venture fund, including identifying and assessing the Limited Partner universe; fund due-diligence criteria; and fund investment terms in Part One
Discusses the investment process, including sourcing investment opportunities; conducting due diligence and negotiating investment terms; adding value as a board member; and exploring exit pathways in Part Two
Offers insights, anecdotes, and wisdom from the experiences of best-in-class practitioners
Includes interviews conducted by Leading Limited Partners/Fund-of-Funds with Credit Suisse, Top Tier Capital Partners, Grove Street Advisors, Rho Capital, Pension Fund Managers, and Family Office Managers
Features the insights of over twenty-five leading venture capital practitioners, frequently featured on Forbes' Midas List of top venture capitalists
Those aspiring to raise a fund, pursue a career in venture capital, or simply understand the art of investing can benefit from The Business of Venture Capital, Second Edition. The companion website offers various tools such as GP Fund Due Diligence Checklist, Investment Due Diligence Checklist, and more, as well as external links to industry white papers and other industry guidelines.
Table of contents
- Foreword
- Preface
- Acknowledgments
-
PART ONE Raising the Venture Fund
- CHAPTER 1 The Basics
- CHAPTER 2 Getting In
- CHAPTER 3 Building Your Career as a Venture Capitalist
- CHAPTER 4 The Universe of Limited Partners
- CHAPTER 5 How Limited Partners Conduct Fund Due Diligence
- CHAPTER 6 Defining Your Fund's Investment Strategy
- CHAPTER 7 How Institutional Investors Evaluate Fund Managers
- CHAPTER 8 Fund Size and Portfolio Construction
- CHAPTER 9 Performance Analysis
- CHAPTER 10 Emerging Managers: A Promise of the Future
- CHAPTER 11 The Venture Capital Firm, Operations, and Culture
- CHAPTER 12 The Fund-Raising Process
- CHAPTER 13 Terms of Investment: The Limited Partnership Agreement
- CHAPTER 14 The Role of Placement Agents in Fund-Raising
-
PART TWO Making Investments
- Note
-
CHAPTER 15 Sourcing Investment Opportunities
- The Best Source: The Network
- Accelerators and Demo-Days
- The VC e-Marketplace: AngelList, Kickstarter, and FundersClub
- Angels
- The Fountainheads of Academia and Research
- Corporate Research
- Trade Conferences
- Pitch Me, Bro
- Competitions: From $40 Million Moonshot to $10K
- Cold Calling
- You Win Some, You Miss Some
- Notes
- CHAPTER 16 The Art of Conducting Due Diligence
- CHAPTER 17 Management Team Diligence
- CHAPTER 18 Diligence beyond Management
-
CHAPTER 19 Structuring Investment Transactions
- The Spirit of the Term Sheet
- Negotiation Stress Points
- Structuring Terms to Generate Target Returns
- Valuation Methods and Other Voodoo Arts
- The Drivers of Valuation
- The Simplified Form of the Venture Capital Method of Valuation
- Comparable Valuations of Similar Investments (Comps)
- Discounted Cash Flow Method
- Convertible Loan
- Equity: Preferred Stock
- Liquidation Preference
- Antidilution Protections
- Milestone-Based Financing: Risk Mitigation or Distraction
- Governance and Control: Protecting Your Securities
- Exit-Related Provisions
- Other Terms
- Syndicating Investments
- Keeping Term Sheets Simple
- The Closing Process: After the Term Sheet
- Notes
- CHAPTER 20 Serving on the Board
- CHAPTER 21 Board Culture, Composition, and Orientation
- CHAPTER 22 Board Value Creation and Evaluation
- CHAPTER 23 Challenges in the Boardroom
- CHAPTER 24 Exit Strategies
- CHAPTER 25 Acquisitions: The Primary Path to an Exit
-
CHAPTER 26 Initial Public Offering
- The IPO Process: The Long and Winding Road
- Steps to an IPO
- Not an Endgame, but a Financing Event
- Timing the Market
- IPO Underpricing and Dutch Auctions
- Information Asymmetry: The Bigger Fool Theory of IPO Underpricing
- The Dutch Auction: Eliminate the Pop and Those Middlemen
- Post IPO: Should VCs Stay Engaged?
- Notes
- CHAPTER 27 Human Psychology
- Afterword
- About the Author
- About the Companion Web Site
- Index
- End User License Agreement
Product information
- Title: The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies, 2nd Edition
- Author(s):
- Release date: August 2014
- Publisher(s): Wiley
- ISBN: 9781118752197
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