Week1_Lecture+Slides_2643

Week1_Lecture+Slides_2643 - FINS3623VentureCapital Week 1...

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    FINS3623 Venture Capital Week 1 – Introduction to the Course
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    Lecture Outline What are Alternative Asset Classes? What is Venture Capital and Private Equity? The Venture Capital Cycle Why is Venture Capital Needed? Overview of the Venture Capital Industry
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    What are Alternative Asset Classes?
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    Australian Investment Grade Notes and Coins: 18% annual return from 2002-2004
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    What are Alternative Asset Classes Investments that Have a limited investment history Are uncommon in investment portfolios Have clearly differentiated features from traditional asset classes (e.g. liquidity) Requires specialist skills to manage Examples include: Art, Films, Notes and Coins, Gold etc. Venture Capital, Private Equity, and Buy-out Funds are some of the most common alternative investments available to investors in the global marketplace
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    What is Venture Capital/Private Equity? Venture capital provides finance for start-up firms that require substantial capital to expand and can not usually access it from conventional sources. Troubled and distressed firms also encounter difficulty in raising capital for restructuring. Private Equity and Venture Capital funds invest in these high-risk high-reward firms.
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    What is Venture Capital/Private Equity? Private equity investors do not only use their own funds. They raise the bulk of their funds from financial institutions and high net worth individuals Pension Funds and University Endowments (in the US) are the most common sources of Funds.
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  The Venture Capital Cycle Entrepreneurs have many ideas that require substantial capital to implement but lack the funds Usually such entrepreneurial projects lack tangible assets, expect several years of negative earnings and have uncertain prospects. As a result it is difficult to attract funding to
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Week1_Lecture+Slides_2643 - FINS3623VentureCapital Week 1...

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