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VC Screening Criteria 风险投资的筛选标准
Venture Capital Firm Requirements (cont’d)
风险投资公司的要求 • Investor group 投资集团 • Rate of return 投资回报率 • Size of investment 投资规模 • Stage of development 发展阶段
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Historical Development of Professional Venture Capital (cont’d)
职业风险投资的发展历程
ARD’s Early Performance
• $3.5 million was raised ($2 million from • •
institutional investors) By end of 1947, ARD had invested in eight ventures, six of which were startups By 1951 the performance was still lack-luster (stock price was at $19 down from the initial offering price of $25 in 1946)
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Historical Development of Professional Venture Capital (cont’d)
职业风险投资的发展历程
1953:
• • • •
Small Business Administration (SBA) was formed Legislation permitted the federal government to actively engage in fostering new business formation
ENTREPRENEURIAL FINANCE
Chapter 12
PROFESSIONAL VENTURE CAPITAL
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Chapter 12: Learning Objectives
Discuss the history & current status of venture investing in the U.S. Explain the professional venture investing cycle and its relevance to entrepreneurs seeking professional venture capital List major elements in the design & structure of a venture capital fund
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Historical Development of Professional Venture Capital (cont’d)
职业风险投资的发展历程
Late 1960s-Early 1970s:
• Boom-Bust Cycle:
Many SBICs began having operating problems due o the mixing of risky venture investments & high financial leverage (debt service commitments)
process of ascertaining the viability of a business plan
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VC Screening Criteria 风险投资的筛选标准
1. Venture Capital Firm Requirements 风险投资公司的要求 2. Characteristics of the Proposal 投资项目的特色 3. Characteristics of the Entrepreneur/Team 企业家/管理团队特色 4. Nature of the Proposed Industry 投资行业的性质 5. Strategy of the Proposed Business 拟议的业务策略
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Historical Development of Professional Venture Capital 职业风险投资的发展历程
Venture Capitalists (VCs):风投资本家
individuals who join in formal, organized firms to raise and distribute venture capital to new and fast-growing ventures
Front-matter Declarations State Securities Disclosures Offering Summary Fund Overview Executive Summary Summary of Terms
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SOLICITING INVESTMENTS: Suppliers of Venture Capital – 25-Year Average
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VC Screening Criteria 风险投资的筛选标准
Venture Capital Firm Requirements 风险投资公司的要求 • Cash out potential 套现潜力 • Equity share 股本份额 • Familiarity with technology, product, market • 熟悉技术，产品，市场 熟悉技术，产品， • Financial provisions for investors • 对投资者的财务规定 • Geographic location 地理位置 • Investor control 投资者控制
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Historical Development of Professional Venture Capital (cont’d)
职业风险投资的发展历程
ARD’s Later Performance:
• In 1957, ARD had invested $70,000 in the • • •
startup company Digital Equipment Corporation (DEC) 1972, ARD was sold for $813 Per Share Original ARD investors received a compound annual return of 14.7% due primarily to DEC Without the DEC investment, the rate of return would have been only 7.4%
Pre-World War II Era:
Most venture investing came from wealthy individuals and families
1946: Beginning of Professional VCs
Formation of American Research & Development (ARD)
1970s:
• Professional VC organizational structure •
changes Movement to private partnerships from public firms & volatile financial markets
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Professional Venture Capital Investing Cycle 职业风险投资周期
1958:
SBA Created Small Business Investment Companies (SBICs) Due to tax and leverage advantages, the SBIC became the primary vehicle for professionally managed venture capital
Deal flow:交易量
flow of business plans and term sheets involved in the venture capital investing process
Due diligence (in venture investing context):尽职调查风险投资的环境
investment management firms having a contract that gives them a 2% of assets annual management fee and 20 percent carried interest
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ORGANIZING THE FUND: 组织基金 VC Fund Placement Memorandum
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OBTAINING COMMITMENTS: 争取承诺 Arrangements with Fund Investors
Capital Call:
when the venture fund calls upon the investors to deliver their investment funds
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Useful Terms专业术语
Carried Interest:附带权益
portion of profits paid to the professional venture capitalist as incentive compensation
Two and Twenty Shops: 2%--20%附带权益
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VC Screening Criteria 风险投资的筛选标准
3. Characteristics of the Entrepreneur/Team