Private Equity  Getting more than money into the company www. venture bean .com Anjana Vivek www.venturebean.com [email_ad...
Private Equity <ul><li>Covers a wide range from </li></ul><ul><li>Angel investment </li></ul><ul><li>to </li></ul><ul><li>...
Private Equity <ul><li>Typically in unlisted instruments and includes </li></ul><ul><li>*  Leveraged buyouts, venture capi...
What do you want from the investor? www. venture bean .com WHO ?   WHY ?   HOW ?   WHEN ?
What do you want from the investor? www. venture bean .com To help you reach  out for the sky… As you attempt to  achieve ...
If it was only about money… <ul><li>… .. All those with money would do well </li></ul><ul><li>And </li></ul><ul><li>…  All...
What do you want from the investor? www. venture bean .com Are you looking for  More than money? * Readings:  1)Do your ho...
Preparation  is the key to success www. venture bean .com
BUSINESS PLAN   The  plan must have structure and include the following: - Business / idea - People behind idea/project - ...
Business Plans www. venture bean .com Readings:  http://www.slideshare.net/anjanavivek/preparing-a-bplan-for-equity-invest...
Identify key issues www. venture bean .com
DISCLOSURE  Prepare  for due diligence by identifying pitfalls upfront and taking steps to mitigate/de-risk to the extent ...
DISCLOSURE  To trigger thinking If  you do not disclose the negatives, the investor will not automatically assume that you...
www. venture bean .com What are the deal drivers?
DEAL ISSUES  Every  business has issues which are  - deal drivers and - deal breakers Try  to identify  key deal issues  f...
DEAL ISSUES  This  can help you plan on how you can leverage on your strengths  This  can help in negotiating a better dea...
Preparing for due diligence www. venture bean .com - Technical - HR - Financial - Tax - Regulatory …  etc
Preparing for due diligence www. venture bean .com Readings:  1) Valuation and deals: avoid throwing away value
Valuation www. venture bean .com Varies over time…  An art and a science
VALUATION  Valuation  is based on: - intangibles and  - tangibles Valuation  can be computed in multiple ways, the popular...
VALUATION  Valuation  may be driven by   - the stake the entrepreneur is    willing to give up at a particular    stage of...
VALUATION  Different  persons can value the same business differently because they may - use different methods of valuatio...
VALUATION  Deals  can sometimes be structured in such a way that the differences in valuation perception are factored, e.g...
VALUATION  Valuation  is also the outcome of negotiations, so it is important to identify one’s bargaining power in relati...
Valuation www. venture bean .com Readings :  1) Some finer points in the valuation of a business 2) Valuation Basics … and...
Understand your bargaining power  www. venture bean .com
Negotiations www. venture bean .com Readings:  1)  Negotiations: A key element in growing your business 2) Negotiating Ins...
To trigger thinking How will you prepare for private equity investment in the company that you are working for? www. ventu...
More information: www. venture bean .com Readings:  www.slideshare.net/anjanavivek http://www.venturebean.com/resources.ht...
THANK YOU For  your time and patient hearing www. venture bean .com
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Private Equity: Money and More

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Private equity should be more than money.. some points towards raising this

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Private Equity: Money and More

  1. 1. Private Equity Getting more than money into the company www. venture bean .com Anjana Vivek www.venturebean.com [email_address] Institute of Chartered Accountants of India: Bangalore Branch Study Circle Meeting: Jan 2010  
  2. 2. Private Equity <ul><li>Covers a wide range from </li></ul><ul><li>Angel investment </li></ul><ul><li>to </li></ul><ul><li>Venture capital </li></ul><ul><li>to </li></ul><ul><li>Unit/division/subsidiary of corporate </li></ul><ul><li>to </li></ul><ul><li>Large private equity placements </li></ul>Rs.
  3. 3. Private Equity <ul><li>Typically in unlisted instruments and includes </li></ul><ul><li>* Leveraged buyouts, venture capital, growth capital, distressed investments, mezzanine capital </li></ul><ul><li>* Reference: http://en.wikipedia.org/wiki/Private_equity </li></ul>
  4. 4. What do you want from the investor? www. venture bean .com WHO ? WHY ? HOW ? WHEN ?
  5. 5. What do you want from the investor? www. venture bean .com To help you reach out for the sky… As you attempt to achieve your dreams? How do you proceed?
  6. 6. If it was only about money… <ul><li>… .. All those with money would do well </li></ul><ul><li>And </li></ul><ul><li>… All those without money would fail… </li></ul>
  7. 7. What do you want from the investor? www. venture bean .com Are you looking for More than money? * Readings: 1)Do your homework well before approaching a venture capitalist 2)VC funds, corporate VCs, or angel investors: whom do you approach? 3) Are you ready for VC investment?
  8. 8. Preparation is the key to success www. venture bean .com
  9. 9. BUSINESS PLAN The plan must have structure and include the following: - Business / idea - People behind idea/project - Market size expected - Marketing strategy - Competition - Financials - Other information which makes this complete www. venture bean .com
  10. 10. Business Plans www. venture bean .com Readings: http://www.slideshare.net/anjanavivek/preparing-a-bplan-for-equity-investment Forecast financials in a business plan
  11. 11. Identify key issues www. venture bean .com
  12. 12. DISCLOSURE Prepare for due diligence by identifying pitfalls upfront and taking steps to mitigate/de-risk to the extent possible www. venture bean .com Query? Would you disclose weak points ?
  13. 13. DISCLOSURE To trigger thinking If you do not disclose the negatives, the investor will not automatically assume that you do not have any negatives in your project/idea www. venture bean .com
  14. 14. www. venture bean .com What are the deal drivers?
  15. 15. DEAL ISSUES Every business has issues which are - deal drivers and - deal breakers Try to identify key deal issues from - your perspective and - the investors perspective www. venture bean .com
  16. 16. DEAL ISSUES This can help you plan on how you can leverage on your strengths This can help in negotiating a better deal www. venture bean .com
  17. 17. Preparing for due diligence www. venture bean .com - Technical - HR - Financial - Tax - Regulatory … etc
  18. 18. Preparing for due diligence www. venture bean .com Readings: 1) Valuation and deals: avoid throwing away value
  19. 19. Valuation www. venture bean .com Varies over time… An art and a science
  20. 20. VALUATION Valuation is based on: - intangibles and - tangibles Valuation can be computed in multiple ways, the popular methods: - multiples of revenue; profit etc. - multiples of key drivers, eg.user base - cash flow based www. venture bean .com
  21. 21. VALUATION Valuation may be driven by - the stake the entrepreneur is willing to give up at a particular stage of investment in the business and - the amount of money required by the business at that stage www. venture bean .com
  22. 22. VALUATION Different persons can value the same business differently because they may - use different methods of valuation - use variations in the methods - have different inputs in the methods Thus, valuation perceptions can vary, and we do have situations where there are divergent views on valuation www. venture bean .com
  23. 23. VALUATION Deals can sometimes be structured in such a way that the differences in valuation perception are factored, e.g. linking valuation to performance www. venture bean .com
  24. 24. VALUATION Valuation is also the outcome of negotiations, so it is important to identify one’s bargaining power in relation to the deal issues www. venture bean .com
  25. 25. Valuation www. venture bean .com Readings : 1) Some finer points in the valuation of a business 2) Valuation Basics … and.. some practical tips
  26. 26. Understand your bargaining power www. venture bean .com
  27. 27. Negotiations www. venture bean .com Readings: 1) Negotiations: A key element in growing your business 2) Negotiating Insights: From IIMB’s MPWE programme
  28. 28. To trigger thinking How will you prepare for private equity investment in the company that you are working for? www. venture bean .com
  29. 29. More information: www. venture bean .com Readings: www.slideshare.net/anjanavivek http://www.venturebean.com/resources.html
  30. 30. THANK YOU For your time and patient hearing www. venture bean .com

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