The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies.pdf

The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies.pdf


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.

Foreword Preface Acknowledgments Part I: Raising the Venture Fund Chapter 1: The Basics Raise the Venture Fund Find the Right Investment Opportunities Generate Financial Returns Roles and Responsibilities Compensation Notes Chapter 2: Getting In Entry-level Positions: Analysts and Associates Internships and Campus Recruitment Mid-level Positions: Principals and MDs Honing Investment Expertise within Allied Fields Senior Partner versus Junior Associate What about Luck? Notes Chapter 3: Building Your Career as a Venture Capitalist Intellectual Stimulation and Financial Returns Aptitudes and Attitudes of Successful Practitioners The Challenges of a VC Career Notes Chapter 4: The Universe of Limited Partners An Overview of Alternative Assets Sources of Capital: Limited Partners Fund-of-Funds FoF Models: Variation of a Theme Comparison of Limited Partnerships Notes Chapter 5: How Limited Partners Conduct Fund Due Diligence Sourcing and First Screens Evaluating the Venture Firms Notes Chapter 6: Defining your Fund's Investment Strategy Sector-Based Strategy Stage and Geography Notes Chapter 7: How LPs Evaluate Fund Managers The Fund Management Team Dynamics: Stability, Skill Set, and Alignment Notes Chapter 8: Fund Size and Portfolio Construction Fit within the LP's Current Portfolio Market Timing Why LPs Terminate Existing Relationships Notes Chapter 9: Performance Analysis Individual Performance and Attribution Fund-Level Performance Comparison Benchmarks Public Market Equivalents The Quest for the Elusive Top Quartile Managers All the Managers Are Above Average Notes Chapter 10: Emerging Managers: A Promise of the Future Why LPs Seek Emerging Managers How Investors Rank Emerging Managers Institutional Allocations for Emerging Managers A Tale of Two Emerging Managers The Global Emerging Manager: 500 Startups Notes Chapter 11: The VC Firm, Operations and Culture The DNA of a firm Governance of the Firm Notes Chapter 12: The Fund Raising Process Build Your Target List of Investors Fund Marketing Materials Presentation Slides Making the Presentation Pitch: Drink Your Own Kool-Aid Attracting the Lead Investor: Your "Nut" Communicate, Create, and Maintain Momentum Announcing the Close Notes Chapter 13: Terms of Investment: The Limited Partnership Agreement Key Terms Fund Financial Terms Fund Governance Terms What Institutional LPs Seek Offering Sweeteners to Attract LPs: A Double-Edged Sword What Matters Most Notes Chapter 14: The Role of Placement Agents in Fund-Raising Agents bring Market Intelligence and Relationships Ethical Challenges Notes Part II: Making Investments Chapter 15: Sourcing Investment Opportunities The Best Source: The Network Accelerators and Demo-days The VC e-marketplace: Angelist, 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 The Due Diligence Checklist What Is Important: Jockey, Horse, or Markets? Who invests in Rap Music and Shaving Blades? Notes Chapter 17: Management Team Diligence Assessing Intangibles How to Assess the Jockey Serial Entrepreneurs versus First-Time Entrepreneurs What about Charisma? The Importance of Conducting Background Investigations Notes Chapter 18: Diligence beyond Management Assessing the Market Evaluating the Idea or Product The Business Model Financial Projections Do Business Plans Matter? Notes 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 VC 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 Self-education: Preparing for Your Board Role Roles and Responsibilities of a Board Member Legal Requirements of Board Service Notes Chapter 21: Board Culture, Composition and Orientation Towards a Better Board Culture A VC Reports to Limited Partners and the VC Firm Importance of Independent Directors Notes Chapter 22: Board Value Creation and Evaluation Good Governance as the First Step toward Value Creation The CEO's Perspective on Venture Capitalist Value Add Board Self-Evaluation Notes Chapter 23: Challenges in the Boardroom Challenges among Shareholders Managing CEO Transition Best Practices in Managing Transitions Alignment of Exit Method, Timing, and Exit Value Notes Chapter 24: Exit Strategies Preconditions for an Exit Secondary Markets Notes Chapter 25: Acquisitions: The Primary Path to an Exit The Sell Process When an Acquirer Comes Knocking The Buy-Side Acquisition Process Deal Killers Notes 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 Emotions versus Logic Reciprocation, Obligations and Indebtedness A VC with Ego: Why Should I Eat Your Leftovers? Conformity (or Groupthink) Rock Stars in the Business That Over-hyped Rolodex is Not as Useful as You Think Notes Afterword About the Author About the Companion Website Index


当当网购书 京东购书 卓越购书