Venture Capital

Venture Capital - Venture Capital Basics 1 Organization and...

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Venture Capital Basics: 1. Organization and Formation 2. Fundraising. 12-18 months. 3. Investment Analysis. Years 1-4. 4. Portfolio Management. Years 2-7. Follow on investments. 5. Exit Investments. Years 3-10. Organization and Formation Venture firms doubled from 1990 to 2000. 700-1,400. Legal Structure 1. LLC. a. Limited life. 10 years. b. Eliminates double taxation. c. GP. d. LPs = investors. e. Capital calls. f. Staffing. $100 mm fund. 2-3 GPs. 1-3 juniors. 1 secretary. g. Compensation. 2% mgmt. fee. 20% carried interest. 2. Fundraising. a. 6-18 months. b. PPM. c. Some specialized investment banks. ML. Momentum. d. Factors: Macroeconomic factors, historical performance. e. First close. Multiple closing dates. 3. Investment Analysis. a. Buyers market v. sellers market.
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b. Focus by maturity. i. Seed. Pre-revenue. The idea. ii. Early stage. Generating revenues but not yet profitable. iii. Late stage. Profitable. iv. Expansion/recapitalization
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Venture Capital - Venture Capital Basics 1 Organization and...

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