Venture Capital How-To: From Raising Funds to Crafting Exit Strategies
2017 saw venture capital funding records broken in the United States, where it reached $84.24 billion, and globally, where it topped $155 billion. Researchers from KPMG are optimistic that the momentum will continue this year in both markets. But, says Wharton Private Equity Professor Bilge Yilmaz, “even with this unparalleled level of opportunity, VC remains one of the most challenging investment areas. For every successful startup, there are dozens of businesses that fail, even after receiving multiple infusions of capital.”
To help institutional investors, venture capitalists, angel investors, and entrepreneurs gain a better understanding of what drives success in early stage investing, Yilmaz is directing a new Wharton Executive Education program focused solely on Venture Capital. It joins a lineup of other new specialized finance programs, including Private Equity: Investing and Creating Value and Corporate Valuation, that leverage Wharton’s world-class financial research and expertise to bring investors, entrepreneurs, and industry professionals the knowledge they need in five intense days.
Citing the pressing need for the program, Yilmaz, who also directs Wharton’s Alternative Investments Initiative, says, “Today, there’s an explosion in funding for startups and high-growth private companies, including not only capital from traditional venture capitalists, but also incubators, angels, and even crowd funding.” But the rapid growth in the space makes it challenging to develop a thorough understanding of how venture capital funds work, how startup investing is different from other asset classes, and how investments can be structured to avoid pitfalls that risk everything.
Yilmaz is joined by other Wharton faculty from the fields of finance, strategy, innovation, and alternative investments, including Professor of Operations, Information and Decisions Serguei Netessine and Adjunct Professors of Finance Kevin Kaiser and David Wessels. Together they share ways to demystify the venture capital process, including how to raise capital from limited partners; develop a systematic way to screen, analyze, and value emerging opportunities; identify risks during deal negotiations; manage investments; and craft exit strategies.
Wessels, who also teaches venture capital, corporate valuation, and performance management to Wharton MBAs, says the program “has been specifically designed for anyone in touch with the VC ecosystem.” That includes venture capitalists, angel investors, founder-entrepreneurs, attorneys, endowment and pension fund advisors, and government leaders who aspire to create an environment of innovation in their local market.
This diverse group of participants is one of the important benefits of executive education programs like Venture Capital. Wessels says, “It’s not just faculty that provides knowledge and insights. The finance colleagues in the classroom bring their expertise and experience and challenge each other’s thinking.”