Session 2 - Doing VC Deals - Lecture Presentation-IM (9 Mar 17) - SESSION 2 DOING VENTURE CAPITAL DEALS Lecture Presentation 9 March 2017 Edgar Miller

Session 2 - Doing VC Deals - Lecture Presentation-IM (9 Mar 17)

This preview shows page 1 - 10 out of 80 pages.

SESSION 2 - DOING VENTURE CAPITAL DEALS Alternative Investments - Private Equity Module MSc Investment Management Programme – 2017 Term 2 Cass Business School Edgar Miller Senior Visiting Fellow Lecture Presentation 9 March 2017
2 SESSION 2 I. Guest Lecturer – Mr Richard Anton: Founding General Partner Oxx, former General Partner Amadeus Capital Partners; former Chairman, British Private Equity &Venture Capital Association II. Problem Set 1 Solutions - Valuing and Structuring Venture Capital Deals III. Valuing Buyout Deals – The Adjusted Present Value Method IV. Case Discussion – Centex Telemanagement, Inc
I - RICHARD ANTON Co-Founder Oxx Co-Founder, Oxx - New VC growth fund Recent Chairman, BVCA Amadeus Capital Partners (18 years), General Partner focused on software Autonomy, Director Business Development & Finance Apax Turnaround management, finance/business development, management consulting MBA, INSEAD BA & MA Mathematics, Cambridge University 3
AMADEUS Early stage venture fund - 120 companies supported over 20 years Communications and Networking Consumer and Business Services Enterprise and Infrastructure software Fabless Semiconductors Hardware and Advanced Materials Medtech and Healthcare IT Cleantech and Resource Efficiency 13 person investment team, 35-40 portfolio companies across Europe, US, Israel, Brazil, & Africa Amadeus and Angels Seed Fund plus co-investment fund Offices in London, Cambridge, San Francisco, & Stockholm 4
5 II – PROBLEM SET 1 SOLUTIONS (Target Return Approach
6 PROBLEM SET 1 SOLUTIONS (Target Return Approach Question 1 (Share of Company Required for £5m Financing - 50% IRR?)
7 PROBLEM SET 1 SOLUTIONS (Target Return Approach Question 1 (Share of Company Required for £5m Financing - 50% IRR?) Question 2 (Number of Shares to Purchase?)
8 PROBLEM SET 1 SOLUTIONS (Target Return Approach 5 Year Excite value = £5m x 20 = £100m Value required by fund in Year 5 = £5m x (1.5) 5 = £38.0m Required share of Excite = £38.0m/ £100m = 38.0% 0.38 = x/(x + 1,000,000 shares) Required shares = x = 612,903 shares •. Share price = £5m/612,903 shares = £8.16 per share) Question 1 (Share of Company Required for £5m Financing - 50% IRR?) Question 2 (Number of Shares to Purchase?) Question 3 (Price per Share?)
9 PROBLEM SET 1 SOLUTIONS (Target Return Approach 5 Year Excite value = £5m x 20 = £100m Value required by fund in Year 5 = £5m x (1.5) 5 = £38.0m Required share of Excite = £38.0m/ £100m = 38.0% 0.38 = x/(x + 1,000,000 shares) Required shares = x = 612,903 shares •. Share price = £5m/612,903 shares = £8.16 per share) •. Post-money valuation = £5m/0.38 = £13.2m Question 1 (Share of Company Required for £5m Financing - 50% IRR?)

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture