Venture Capital
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share

Venture Capital

  • 1,232 views
Uploaded on

Venture Capital - What it is, how it's used and strategies implemented

Venture Capital - What it is, how it's used and strategies implemented

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
1,232
On Slideshare
1,230
From Embeds
2
Number of Embeds
1

Actions

Shares
Downloads
37
Comments
0
Likes
1

Embeds 2

http://tracking.tweetminster.co.uk 2

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. VENTURE CAPITAL HTW – University of Applied Sciences International Business Law Prof. Dr. S. Dietrich Navi K. J. Phifer, Janin Viere, Lucia Soskova, Lisa Petzold
  • 2. Table of Contents 1. Introduction • Definitions 2. Venture Capital • Historical Background • What, Why, Who ? • How to find Investors • The role of VC investors • VC financing cycle • Direct/indirect VC 23.03.12 2Venture Capital 1. Exit Strategies • IPO‘s • Trade Sales • Secondary Sale • Buy Backs • Liquidation • Advantages/Disadvantages • Discussion Points • Conclusion
  • 3. Definitions enture Capital orporate Venture Capital rivate Equity 23.03.12 Venture Capital 3
  • 4. Definitions 23.03.12 Venture Capital 4
  • 5. Historical Background 1946 – 1977: started out in USA 1960s: Germany 1970 – 1971: Financial support offered 2000 – 2001: “.Com-Bubble Burst“  total investment 2000: $ 16.8bn 23.03.12 Venture Capital 5
  • 6. VC - What, Why, Who ? Helps to foster growth Innovation capital“ echnology 23.03.12 Venture Capital 6
  • 7. How to find VC investors? nternet searches ersonal contacts / recommendations anks 23.03.12 Venture Capital 7
  • 8. The Role of VC-Investors inance dvice onsultation 23.03.12 Venture Capital 8
  • 9. Types of VC - Financing • Expansion Financing • Bridge Financing • Turnaround Financing • Replacement Capital 23.03.12 Venture Capital 9
  • 10. VC Financing - Cycle 1. Screening 2. Seed Financing 3. Early Stages 4. Growth Finance 5. Exit Strategies (Janin) 23.03.12 Venture Capital 10
  • 11. Phase 1: Screening usiness plan creation elect and contact investors creening 23.03.12 Venture Capital 11
  • 12. Questions to ask before considering VC financing  Do we have high growth prospects and a team ambitous enough, to grow rapidly?  Do we have a competitive edge or a unique selling product? 23.03.12 Venture Capital 12
  • 13. Questions to ask before considering VC financing  Are we willing to sell company shares to a private equity investor?  Do we have a realistic exit opportunity for all shareholders to realise desired 23.03.12 Venture Capital 13
  • 14. Phase 2: Seed Financing & R (Development & Research) ery high risk ifficult to judge commercial success 23.03.12 Venture Capital 14
  • 15. Phase 3: Early Stages ests (esp. in pharmaceutical and bio-tech. fields) arketing activities 23.03.12 Venture Capital 15
  • 16. Phase 4: Growth Finance ompany hits market eeds to stay afloat and grow to compete urther advice 23.03.12 Venture Capital 16
  • 17. Phase 5: Exit Strategies • IPOs • Trade Sales • Secondary Sales • Buy Backs • Liquidations 23.03.12 Venture Capital 17
  • 18. Phase 5: Exit Strategies • IPOs 23.03.12 18Venture Capital
  • 19. Phase 5: Exit Strategies • Trade Sales 23.03.12 19Venture Capital
  • 20. Phase 5: Exit Strategies • Secondary Sales 23.03.12 20Venture Capital
  • 21. Phase 5: Exit Strategies • Buy Backs 23.03.12 21Venture Capital
  • 22. Phase 5: Exit Strategies • Liquidations 23.03.12 22Venture Capital
  • 23. Phase 5 Exit Strategies - Statistics • 2008, in exit volume terms: • trade sales dominated at 35% • sales to other private equity firms came to 30% • divestments by IPO/sale of quoted equity were 9% • trade sales dropped from 89 to 74 • sales to private equity firms increased from 10 to 29 • Total losses were down from € 139 million and 151 companies to € 118 million and 136 companies • As a result of declining share prices both declined the number of exits by IPO (from 7 to 3) and through the sale of shares (from 34 to 10). 23.03.12 Venture Capital 23
  • 24. Advantages/Disadvantages • The VC Investor • Investment • Experience, advice, mentoring • Objectivity • Networking • Recruitment • Credibility • Shared risk 23.03.12 Venture Capital 24 Mandatory exit Loss of independence Right to lay off the workforce
  • 25. Advantages/Disadvantages • Capital • Solely for our business • Start-up financing • Liable equity within the company • Improved rating 23.03.12 Venture Capital 25
  • 26. Advantages/Disadvantages • Due Diligence Advantages Disadvantages • Company realises: − Where it stands in the market − What/where to improve − Possible future developments 23.03.12 Venture Capital 26 ime oney
  • 27. Advantages/Disadvantages • The Company Advantages • Growth • Value • Security • Equity ratio 23.03.12 Venture Capital 27
  • 28. Advantages/Disadvantages • Dilution Disadvantages • Dilution-decrease of sth • Anti-dilution protection − Milestone financing − Pay-to-play − Liquidation preferences 23.03.12 Venture Capital 28
  • 29. Advantages/Disadvantages • Contractual protection for the VC investor • Information rights • Control rights • Representation and warranties • Anti-dilution protection 23.03.12 Venture Capital 29
  • 30. Advantages/Disadvantages • Restrictions on the Transfer of Shares by Shareholders • The articles and shareholders‘ agreement • Exceptions − Investors‘ shares − Founders‘ shares 23.03.12 30Venture Capital
  • 31. Advantages/Disadvantages • Investor‘s Protection-Exit • Drag-alone rights • Tag-along rights 23.03.12 31Venture Capital
  • 32. Advantages/Disadvantages • Taxation 23.03.12 32Venture Capital
  • 33. Discussion Points • Obstacles • Alternatives • Our best options 23.03.12 Venture Capital 33
  • 34. Conclusion • Augumus Pecumian GmbH 23.03.12 Venture Capital 34