notes on reading # 15

notes on reading # 15 - U.S House of representatives...

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U.S House of representatives committee on financial services Introduction Polaris venture partners, a venture capital firm Mission to identify and invest in exceptional entrepreneurs and operating companies with innovative ideas and the promise to become market leaders. Areas of information technology, life sciences, digital media, and consumer and business services. At Polaris we build companies by actively partnering with each entrepreneur and management team to help propel their ideas into market leading businesses. We do this by providing a small amount of capital and a large amount of operating expertise and strategic counsel over a long period of time. While providing capital is the first order of business, it is the least time consuming of all our activities. We also recruit and attract employees at all levels. We identify and structure strategic partnerships. We raise additional equity to help the company make it to the next milestone. And, we're available 24/7 to support great teams, solve problems, identify opportunities, and detect "land mines." 1) Why the venture capital industry does not create systemic risk, 2) Why the government must continue to embrace entrepreneurial risk, 3) How sweeping venture capital into the originally introduced regulatory proposals would have been harmful to our industry and economic growth, and most importantly 4) How we might work within the framework of your legislative draft to achieve transparency and oversight without burdening our asset class. Venture capital investment overview The contained structure of a venture capital fund, the long term nature of our investments, and the straightforward cash for equity model make our asset class unique. Venture capital funds typically are organized as private limited partnerships. Our investors, referred to as the limited partners (LPs), commit to our fund a fixed amount for a fixed term of at least 10 years, sometimes extending to 12 or more years. During that time, the venture capitalists that make investment decisions on behalf of the fund form the general partnership (the gp), and we supply the rest of the capital for the fund from our own personal assets. The venture industry has focused on high technology areas such as information technology, life sciences, and more recently, clean technology. Once we have identified a promising opportunity, we vet the management team and conduct due diligence research on the company, the market, the financial projections and other areas. For those companies that clear this investigation, we make an investment in exchange for equity ownership in the business. Our ultimate goal is what we refer to as an exit – which is when the company is strong enough to either go public on a
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This note was uploaded on 11/29/2010 for the course PSC 222 taught by Professor Jing during the Spring '10 term at Rochester.

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notes on reading # 15 - U.S House of representatives...

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