Pe funds focus on different portfolio company

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: s Corporate Finance, Tri Vi Dang, Columbia University, Fall 2013 18 Corporate Finance, Tri Vi Dang, Columbia University, Fall 2013 19 Corporate Finance, Tri Vi Dang, Columbia University, Fall 2013 20 Corporate Finance, Tri Vi Dang, Columbia University, Fall 2013 21 Corporate Finance, Tri Vi Dang, Columbia University, Fall 2013 22 II.2.E. History and Investment Patterns of VC Finance Corporate Finance, Tri Vi Dang, Columbia University, Fall 2013 23 Remark Venture Capital (VC) finance is a special form of private equity finance. Invest to fund the internal growth of companies Build new businesses, not acquire existing businesses Corporate Finance, Tri Vi Dang, Columbia University, Fall 2013 24 The History of Venture Capital Finance The first venture capital firm was established in 1946: American Research and Development Corporation (ARDC) It was founded by Georges Doriot (founder of INSEAD and former dean of Harvard BS) Karl Compton (former president of MIT) Ralph Flanders Corporate Finance, Tri Vi Dang, Columbia University, Fall 2013 25 Small Business Investment Act of 1958 - Small Business Investment Act of 1958. - First steps toward a professionally-managed VC industry - Allows U.S. Small Business Administration (SBA) to license private "Small Business Investment Companies" (SBICs) - help finance and manage small entrepreneurial businesses Limited partnership - Development of the limited partnerships for VC investments in the 1960s Corporate Finance, Tri Vi Dang, Columbia University, Fall 2013 26 Relaxation of investment rules - Relaxation of investment rules for U.S. pension funds in 1979 - Large inflows from these investors to VC finance - The participation by pension funds hastened the participation for other institutional investors - Begin of modern VC era Corporate Finance, Tri Vi Dang, Columbia University, Fall 2013 27 Silicon Valley - Public successes of VCC industry in the 1970s and early 1980s (e.g., Digital Equipment Corporation, Apple, Genentech) gave rise to a major proliferation of VC...
View Full Document

Ask a homework question - tutors are online