The business of venture capital : insights from leading practitioners on the art of raising a fund, deal structuring, value creation, and exit strategies /

"The definitive guide to demystifying the venture capital businessThe 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 t...

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Bibliographic Details
Main Author: Ramsinghani, Mahendra (Author)
Format: eBook
Language:English
Published: Hoboken, New Jersey : John Wiley & Sons, [2014]
Edition:Second edition.
Series:The Wiley finance series
Subjects:
Online Access:CONNECT
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100 1 |a Ramsinghani, Mahendra,  |e author. 
245 1 4 |a The business of venture capital :  |b insights from leading practitioners on the art of raising a fund, deal structuring, value creation, and exit strategies /  |c Mahendra Ramsinghani. 
250 |a Second edition. 
264 1 |a Hoboken, New Jersey :  |b John Wiley & Sons,  |c [2014] 
264 4 |c ©2014 
300 |a 1 online resource (xxiii, 408 pages) :  |b illustration 
336 |a text  |b txt  |2 rdacontent 
337 |a computer  |b c  |2 rdamedia 
338 |a online resource  |b cr  |2 rdacarrier 
490 0 |a The Wiley finance series 
500 |a Includes index. 
588 0 |a Print version record and CIP data provided by publisher. 
504 |a Includes bibliographical references and index. 
520 |a "The definitive guide to demystifying the venture capital businessThe 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"--  |c Provided by publisher 
505 0 |a The Business of Venture Capital -- Contents -- Foreword -- Preface -- Acknowledgments -- PART One Raising the Venture Fund -- CHAPTER 1 The Basics -- RAISE THE VENTURE FUND -- FIND THE RIGHT INVESTMENT OPPORTUNITIES -- GENERATE FINANCIAL RETURNS -- ROLES AND RESPONSIBILITIES -- COMPENSATION -- Carried Interests -- NOTES -- CHAPTER 2 Getting In -- ENTRY-LEVEL POSITIONS: ANALYSTS AND ASSOCIATES -- INTERNSHIPS AND CAMPUS RECRUITMENT -- MIDLEVEL POSITIONS: PRINCIPALS AND MDS -- HONING INVESTMENT EXPERTISE WITHIN ALLIED FIELDS -- Corporate Venture Capital and Angel Networks -- Institutional Investors -- Service Firms and Media -- From Entrepreneur to VC -- SENIOR PARTNER VERSUS JUNIOR ASSOCIATE -- WHAT ABOUT LUCK? -- NOTES -- CHAPTER 3 Building Your Career as a Venture Capitalist -- INTELLECTUAL STIMULATION AND FINANCIAL RETURNS -- Intellectual Stimulation -- Mentor Capitalists -- Small Part of Something Big -- APTITUDES AND ATTITUDES OF SUCCESSFUL PRACTITIONERS -- Ability to Pick the Right Investments -- VC = Value Creation -- Generalist versus Specialist: Jack of All and Master of All -- Tenacity: Be an Unstoppable Force -- THE CHALLENGES OF A VC CAREER -- NOTES -- CHAPTER 4 The Universe of Limited Partners -- AN OVERVIEW OF ALTERNATIVE ASSETS -- SOURCES OF CAPITAL: LIMITED PARTNERS -- Pension Funds -- Endowments and Foundations -- Finance Companies -- Insurance Companies -- Family Offices and High-Net-Worth Individuals -- Corporate Operating Funds -- FUND OF FUNDS -- FOF MODELS: VARIATION OF A THEME -- Targeting the Best in Class: Top Tier Capital Partners -- Laser Focused on Micro-Venture Capital Funds: Cendana Capital -- Spurring Innovation and Regional Growth: Renaissance Venture Capital Fund -- COMPARISON OF LIMITED PARTNERSHIPS -- NOTES -- CHAPTER 5 How Limited Partners Conduct Fund Due Diligence -- SOURCING AND FIRST SCREENS. 
505 8 |a EVALUATING THE VENTURE FIRMS -- NOTES -- CHAPTER 6 Defining Your Fund's Investment Strategy -- SECTOR-BASED STRATEGY -- STAGE AND GEOGRAPHY -- White Space Investing: The Venture Practitioner as a Founder -- When Investment Strategy Shifts and Drifts -- NOTES -- CHAPTER 7 How Institutional Investors Evaluate Fund Managers -- THE FUND MANAGEMENT TEAM DYNAMICS: STABILITY, SKILL SET, AND ALIGNMENT -- Stability and Alignment: Will the Family Stay Together? -- Identifying Complementary Skill Sets -- The Importance of Soft Skills -- Generalists versus Specialists -- Social Capital: Who You Know Matters -- 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 -- A Futures Option -- Creativity, Hunger, and Performance -- 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 Venture Capital Firm, Operations, and Culture -- THE DNA OF A FIRM -- The Firm as a Group of Cowboys -- The Firm as an Agency -- The Firm as a Community Creator -- GOVERNANCE OF THE FIRM -- The Firm's Operational Guidelines -- Carried Interests -- Administration and Operations: The Back Office -- 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®. 
505 8 |a 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 -- Management Fees -- Financial Commitment of the General Partners -- Carried Interests and Performance-Based Triggers -- Waterfall -- Clawbacks -- FUND GOVERNANCE TERMS -- Investment Limitations -- Conflicts of Interest -- Key Person Provisions -- No-Fault Divorce -- Indemnification/Standard of Care -- Confidentiality -- 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 Two: Making Investments -- 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 -- THE DUE DILIGENCE CHECKLIST -- WHAT IS IMPORTANT: JOCKEY, HORSE, OR MARKETS? -- WHO INVESTS IN RAP MUSIC AND SHAVING BLADES? -- Rap Genius -- Blue Bottle Coffee -- Dollar Shave Club -- NOTES -- CHAPTER 17 Management Team Diligence -- ASSESSING INTANGIBLES -- Integrity -- Team Building -- Execution: Lambs versus Cheetahs -- 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. 
505 8 |a 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 VENTURE CAPITAL METHOD OF VALUATION -- COMPARABLE VALUATIONS OF SIMILAR INVESTMENTS (COMPS) -- DISCOUNTED CASH FLOW METHOD -- CONVERTIBLE LOAN -- Bridge Loan -- EQUITY: PREFERRED STOCK -- Warrants -- Options -- LIQUIDATION PREFERENCE -- Stacking of Liquidation Preferences over Multiple Rounds -- ANTIDILUTION PROTECTIONS -- Dividends -- Pay-to-Play -- Preemptive Rights/Right of First Refusal -- MILESTONE-BASED FINANCING: RISK MITIGATION OR DISTRACTION -- GOVERNANCE AND CONTROL: PROTECTING YOUR SECURITIES -- EXIT-RELATED PROVISIONS -- Redemption -- Drag-Along Rights/Tagalong Rights and Co-Sale Agreements -- Conversion to Common at Public Offering, Registration Rights, and Piggyback Rights -- OTHER TERMS -- Employment-Related 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 -- Key Roles of a Board Member -- LEGAL REQUIREMENTS OF BOARD SERVICE -- Fiduciary Duties -- Confidentiality and Disclosure -- NOTES -- CHAPTER 21 Board Culture, Composition, and Orientation -- TOWARD A BETTER BOARD CULTURE -- Build a Trusted Partnership -- Ensure Open Communication Channels -- Avoid Complacency -- Align Interests of All Shareholders and Management -- A VC REPORTS TO LIMITED PARTNERS AND THE VENTURE CAPITAL FIRM -- IMPORTANCE OF INDEPENDENT DIRECTORS -- NOTES. 
505 8 |a CHAPTER 22 Board Value Creation and Evaluation -- GOOD GOVERNANCE AS THE FIRST STEP TOWARD VALUE CREATION -- THE CEO'S PERSPECTIVE ON VC VALUE ADD -- Industry Expertise as a Value Driver -- Sales and Vendor Relationships as a Value Driver -- Business Strategy as a Value Driver -- BOARD SELF-EVALUATION -- NOTES -- CHAPTER 23 Challenges in the Boardroom -- CHALLENGES AMONG SHAREHOLDERS -- Cash Flow-Related Matters -- Performance-Related Challenges -- CEO Transitions -- 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 -- Alignment of Interests of Stakeholders -- Alignment of Exit Value: What's a Few Hundred Million, Anyway? -- SECONDARY MARKETS -- NOTES -- CHAPTER 25 Acquisitions: The Primary Path to an Exit -- THE SELL PROCESS -- Step 1: Test the Waters -- Step 2: Formalize the Process-Hire an Investment Banker -- Step 3: Conduct Due Diligence -- Step 4: Negotiate/Structure the Transaction -- Step 5: Approvals and Closing -- 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 -- The Bake-Off -- Hire an Underwriter -- File the S-1/Prospectus -- Quiet Period Begins -- The Road Show: Which City Are We In, Again? -- Great Demand, or Put It on Ice? -- 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? 
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