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The course provides an introduction to Private Equity in general and the Venture Capital market in particular. It examines the roles of each of the key players in a deal, the typical structuring issues and parameters, the key stages of the investment process as well as the main issues affecting the deal.
It examines best practice for the structure of VC investments, the different processes which they may deploy in terms of their participation in the valuation, financing and monitoring of the companies in which they invest, as well as the current state of the market, exits, and the future of the industry as a whole.
The course includes exercises, case studies and many references to past investments.
Course categories:Investment Banking / M & A Courses, Private Equity / Venture Capital, Private Equity / Venture Capital Inhouse
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Introduction
- The Private equity spectrum (VC vs leveraged deals)
- First stage / Venture Capital – start-ups & seed capital
- Second stage – development & expansion capital, Leveraged deals (MBOs, LBOs)
- Sponsors & market structure
- Traditional VC funds
- Business angels & Corporate Venturing
- VCTs & EIS providers
- Regional venture capital funds & Enterprise capital funds
- Other players in the deal and their roles
- The key value drivers of PE
VC Fund structure
- Structuring objectives for Investors & Managers
- Typical Fund structures
- Self-liquidating, Evergreen, Listed
- Transparent structures vs Non-transparent structures
- Limited Partnerships – Structure of a typical VC fund (Limited partnership)
- Pros & Cons
- Overview of typical fund structure
- Dramatis personae in the Fund (GP, LP, Founder, Fund manager)
- Role & requirements of each of the parties
- Key terms and conditions of the Fund
- Fees (management, transaction, monitoring)
- Carry and hurdle rates
- Approach to abort costs, break fees etc
- Key documents in the fund (overview)
- Limited partnership Agreement (dealing with Side letters)
- Management Agreement
- Subscription Agreement & Acceptance Letters
- Leavers & Joiners etc
- The Information Memorandum or Private Placement Memo (“PPM”)
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Valuation and Financing issues
- Entry valuation
- IRR & DCF
- Alternative techniques
- Structuring the equity (note VC has no external debt)
- Pure equity (Management & VC)
- Loans vs preference shares
The Investment Process
- Due diligence
- The Offer letter
- The Investment (Shareholders’) agreement
- Monitoring the investment
Venture Capital Exits
- Soft vs Hard exits
- Soft exits: refinancing/releveraging, other methods of extracting cash
- Hard exits IPO, trade sale, Secondary deals
- How to make a successful exit
Hot topics
- AIFM Directive
- The Operating Model
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