Introduction to Venture Capital

1
Chapter 1

• Introduction to Venture Capital

2
What is a VC?

• (1) A VC is a financial intermediary, meaning
  that they take the investors capital and invest
  it directly in portfolio companies.
• (2) A VC will only invest in private companies.
  This means that once the investments are made,
  the companies cannot be immediately traded on a
  public exchange.
• (3) A VC takes an active role in monitoring and
  helping the companies in his portfolio.
• (4) A VCs primary goal is to maximize his
  financial return by exiting investments through a
  sale or an initial public offering (IPO).
• (5) VCs invest in order to fund the internal
  growth of companies.

3
THE FLOW-OF-FUNDS IN THE VENTURE CAPITAL CYCLE
4
ALTERNATIVE INVESTMENTS
Private Equity
Mezzanine
Distress
Hedge Funds
5
What Do VCs and Buyout Firms Do?

• Investing
• Monitoring
• Exiting

6
Private Equity

• Illiquid investments
• Who should invest in illiquid assets?

7
Chapter 2

• The VC Players

8
Investment, Pre-Boom
9
Investment, Boom and Post-Boom
10
Stages of Growth

• Early-Stage
• Seed
• Startup
• Other Early-Stage
• Mid-Stage (expansion)
• Late-Stage
• Generic Late Stage
• Bridge/Mezzanine

11
Investment by Stage
12
Investment by Industry