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Venture Capital 101 | Online Course | By Silicon Valley VCs

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Go to www.slidebooks.com to Download and Reuse Now this Venture Capital Online Course | Created By ex-Deloitte Consultants & Venture Capitalists.

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Venture Capital 101 | Online Course | By Silicon Valley VCs

  1. 1. 11 Venture Capital 101 Training created by Ex-Deloitte and McKinsey Consultants and JP Morgan Investment Bankers
  2. 2. 22 What is a Venture Capital Firm? Sources of capital Venture Capital Firm managing the Fund Startups and small businesses • Venture capital firms mostly invest in start-ups and small businesses with high growth potential Pension Funds Corporations High net worth individuals $$$ $$$ $$$ Venture Capitalist Venture Capitalist Venture Capitalist Entrepreneurs Startups Small Businesses $$$ $$$ $$$
  3. 3. 33 What are the 3 key differences between Venture Capital and Private Equity? Start-ups and small businesses Types of companies they invest in 1 <$10 millions in multiple startups Amount of money they invest 2 50% or less Percentage of ownership in the company they invest in 3 Venture Capital Firms Private Equity Firms Mature companies >$100 millions in a single company 100% • Even if both Venture Capital firms and Private Equity firms invest in privately held company, there are usually 3 key differences
  4. 4. 44 How does the Venture Capital (VC) industry look like? • The venture capital industry is a major shaker, funding companies developing technological and service innovations long before they become mainstream • Venture-backed firms are better performer than non Venture- backed firms * • 400+ VC firms in the US • 5-10 year investment horizon • Co-investment with other VCs common *Source: National venture capital association
  5. 5. 5 Download Now the rest of this Document and 10,000+ Powerpoint and Excel Documents at www.slidebooks.com or by clicking anywhere on this page Download Now
  6. 6. 66 What is the growth of a successful start-up? Revenue Time Early Stage Later StageSeed Capital Exit Market FFF & Angels IPO Wallstreet VC (M&A, Strategic Alliances)
  7. 7. 77 When are the usual funding rounds? Revenue Time Early Stage Later StageSeed Capital Exit Market FFF & Angels IPO Wallstreet VC (M&A, Strategic Alliances) A B C Seed
  8. 8. 88 What does Seed Funding mean? Revenue Time Early Stage Later StageSeed Capital Exit Market FFF & Angels IPO Wallstreet VC (M&A, Strategic Alliances) Seed capital helps to transform a seed (or business idea) into a tree (or mature operating business). The capital raised is roughly around $500,000 to 2 million, usually to define more in details their product and customers and carry out an initial market research. The key players in this round are usually angel investors and early stage venture capital firms which are not afraid of taking higher risk. Seed
  9. 9. 99 What does Series A Funding mean? Revenue Time Early Stage Later StageSeed Capital Exit Market FFF & Angels IPO Wallstreet VC (M&A, Strategic Alliances) A Series A funding is useful in optimizing product and user base. In this round, it’s important to define a profitable business model. Typically, Series A rounds raise approximately 2 million to 15 million. The investors involved in the Series A round come from more traditional venture capital firms such as for example Benchmark and Greylock.
  10. 10. 1010 What does Series B Funding mean? Revenue Time Early Stage Later StageSeed Capital Exit Market FFF & Angels IPO Wallstreet VC (M&A, Strategic Alliances) Series B rounds are all about taking businesses to the next level, past the development stage. Estimated capital raised hovers around $7 to 10 million and is partly allocated to grow the team and expand market reach. B
  11. 11. 11 Download Now the rest of this Document and 10,000+ Powerpoint and Excel Documents at www.slidebooks.com or by clicking anywhere on this page Download Now
  12. 12. 1212 What does Series C Funding mean? Revenue Time Early Stage Later StageSeed Capital Exit Market FFF & Angels IPO Wallstreet VC (M&A, Strategic Alliances) In Series C rounds, investors inject capital into already successful businesses. This final round is about perfecting and continuing to scale. Companies may raise five million to hundreds of millions. As the investment gets less risky, more investors come to play such as hedge funds, investment banks, private equity firms and big secondary market groups. C
  13. 13. 1313 What is the usual Venture Capital structure? Limited Partners or investors Public pension funds, Corporate pension funds, Insurance companies, High net worth individuals, Foundations, Fund-of-funds, sovereign wealth funds, etc Venture Capital Firm General Partner Venture Capital Fund Limited Partnership Investment Investment Investment Ownership of the fundOwnership + Management of the fund The fund’s ownership of the portfolio investments
  14. 14. 1414 What is the Venture Capital process? Fund raising Target screening Due Diligence Deal Exit Investment Strategy $
  15. 15. 1515 What is the Venture Capital process? Fund raising Target screening Due Diligence Deal Exit Investment Strategy $ • Identify the industries and markets you want to focus on, making sure you diversify your risks: Industry A (X%), Industry B (X%) and Industry C (X%) • Define the stage you want to focus on: Seed (X%), Series A (X%), Series B (X%), Series C+ (X%) • Identify your investment size for each stage: Seed: $250K-$500K, Series A: $500K-$1M (2x Seed), Series B: $1M-$2M (2x Series A), Series C: $3M-$6M (3x Series B) • Define potential strategic partnership with other VC firms or Business Angels • Create your team, combining complementary skills: successful Entrepreneurs, Investment Bankers, Management Consultants • Identify the minimum revenue or EBITDA the target companies you want to invest in should have • Anticipate your target ownership range: 10%-40% • Define your Target return objective: 5x-10x+ • Agree on your exposure: no more than 10% of fund in any one company • Identify what added value you can bring, besides the capital Key Activities (with examples)
  16. 16. 1616 What is the Venture Capital process? Fund raising Target screening Due Diligence Deal Exit Investment Strategy $ • Identify the key contacts you could leverage within and outside your network: • Fund of funds • Foundations • High net worth individuals • Prepare a comprehensive pitch in order to convince the potential investors that the partners within your firm: • Have a big pool of startups investment to choose from • Have a good and sustainable relationship between them • Are able to identify the right start-ups to invest in • Will bring some diversity within the investor portfolio • Be ready to hear the answer “No” Key Activities
  17. 17. 17 Download Now the rest of this Document and 10,000+ Powerpoint and Excel Documents at www.slidebooks.com or by clicking anywhere on this page Download Now

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