Venture capitalists generally take a leap of faith on a business idea or founder when choosing to invest in a start-up. They have to value a company whose future financial success hinges on an unproven technology or product that hasn’t been fully commercialized or has yet to generate any revenue. And because of the longer time horizon to profitability and a greater degree of uncertainty of achieving success, venture capital has a risk-return profile that is significantly different from that of a conventional, established business with predictable revenues. As a result, the tools and valuation methods venture capitalists use to assess a business without any tangible assets is different too.
Venture Capital starts with a discussion on how VC funds are organized, how investments are selected, and how due diligence is conducted. Participants will examine case studies that detail a transaction from beginning to end. In this manner, participants will see how a deal is structured, learn more about the differing incentives of a VC fund and entrepreneurs, and gain a deeper understanding of venture investing. This program will provide participants a rigorous framework both to evaluate investment opportunities and to manage a multi-stage investment process in an innovative firm.
Session topics may include:
- Limited Partner/General Partner Negotiation and Contracting
- The VC Business Model: Sourcing, Screening, and Selection
- Venture Capital Valuation Method
- Term Sheets: The Venture Capitalist's and Entrepreneur's perspectives
- Deal Sourcing
- Managing Innovative Processes
- Later-Round Financing
- Preferred Stock Valuation
- Exit Strategies