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Venture Funding and Strategies. Presentation Structure. Sources of Funds Investors – private equity, VCs, Angels Loans – Bank Loans – SBA Loans Government Subsidies – SBIR Grants, Green Tech Subsidies Exit Strategies Merger Acquisition Management or Employee Buyout, LBO

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Presentation structure l.jpg
Presentation Structure

  • Sources of Funds

    • Investors – private equity, VCs, Angels

    • Loans – Bank Loans – SBA Loans

    • Government Subsidies – SBIR Grants, Green Tech Subsidies

  • Exit Strategies

    • Merger Acquisition

    • Management or Employee Buyout, LBO

    • Transition Companies

    • IPO

    • Bankruptcy


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Investors

  • Private Equity Firms – TPG Capital, Carlyle Group, KKR, Apollo, Bain, Cerberus

    • Invest: $ Billions

  • Venture Capital Firms – Draper/Fisher/Jurvetson, Sequoia, Accel, Highland, Greylock, KPCB

    • Invest: $ Millions

  • Angels – Tech Coast Angels, Pasadena Angels

    • Invest: $ Hundreds of Thousands

    • Accredited Investors


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Private Equity Firms

“Corporate Flippers”


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10 Largest Private Equity FirmsBy Funds Raised

  • 1. TPG Capital

  • 2. Goldman Sachs Principal Investment Area

  • 3. The Carlyle Group

  • 4. Kohlberg Kravis Roberts

  • 5. The Blackstone Group

  • 6. Apollo Global Management

  • 7. Bain Capital

  • 8. CVC Capital Partners

  • 9. First Reserve Corporation

  • 10. Hellman & Friedman


Largest private equity deals l.jpg
Largest Private Equity Deals

  • 15. 2005 Hertz: $16.95 billion by Carlyle, Merrill Lynch and Clayton Dubilier & Rice

  • 14. 2005 Capmark: $18.88 billion by Kohlberg Kravis Roberts

  • 13. 2006 Albertson's: $19.05 billion by Cerberus Capital Management

  • 12. 2006 Freescale Semiconductor: $19.27 billion by Blackstone, Carlyle, Permira and TPG

  • 11. 2006 Kinder Morgan Oil: $23.65 billion - Carlyle, Goldman Sachs and Riverstone

  • 10. 2007 Alliance Boots (UK): $26.4 billion - KKR


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  • 9. 2007 Hilton Hotels: $27.68 billion - Blackstone

  • 8. 2006 Clear Channel: $28.14 billion - KKR, Bain Capital and Thomas H. Lee

  • 7. 2007 Alltel: $28.74 billion - Goldman Sachs and TPG Capital

  • 6. 2006 Harrah's Entertainment: $30 billion - Apollo Global Management and TPG

  • 5. 2007 First Data: $30.87 billion - KKR and TPG

  • 4. 2006 Hospital Corporation of America: $35.81 billion - Bain, KKR and Merrill Lynch

  • 3. 2007 Equity Office Properties: $41.41 billion - Blackstone

  • 2. 2007 Energy Future Holdings: $47.23 billion - KKR, TPG and Goldman Sachs

  • 1. 1989 RJR Nabisco: $55.38 billion - KKR


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Venture Capital Firms

Finding the VC Firm





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http://thomsonreuters.com/products_services/financial/financial_products/a-z/pratts_guide/http://thomsonreuters.com/products_services/financial/financial_products/a-z/pratts_guide/


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Venture Meetingshttp://thomsonreuters.com/products_services/financial/financial_products/a-z/pratts_guide/

Southern California


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http://tcvn.org/http://thomsonreuters.com/products_services/financial/financial_products/a-z/pratts_guide/


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http://www.lava.org/mc/page.do?sitePageId=128863&orgId=lavhttp://thomsonreuters.com/products_services/financial/financial_products/a-z/pratts_guide/


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http://www.entforum.caltech.edu/http://thomsonreuters.com/products_services/financial/financial_products/a-z/pratts_guide/


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http://www.boogar.com/resources/venturecapital/asia_pacific6.htmhttp://www.boogar.com/resources/venturecapital/asia_pacific6.htm


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http://www.nvca.org/index.php?option=com_content&view=article&id=141&Itemid=589http://www.nvca.org/index.php?option=com_content&view=article&id=141&Itemid=589


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The Term Sheethttp://www.nvca.org/index.php?option=com_content&view=article&id=141&Itemid=589

  • http://www.askthevc.com/blog/

  • http://www.feld.com/wp/archives/category/term-sheet

  • http://www.veri.com/t/understanding-term-sheets/1301

  • http://www.whichdraft.com/venture_capital_financing/term_sheets.html


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Topics and Issues Covered in Term Sheetshttp://www.nvca.org/index.php?option=com_content&view=article&id=141&Itemid=589

http://www.feld.com/wp/archives/category/term-sheet


Us venture capital investments by the numbers l.jpg

https://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/Q3%202011%20MoneyTree%20Report.pdfhttps://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/Q3%202011%20MoneyTree%20Report.pdf

US Venture Capital InvestmentsBy the Numbers

National Venture Capital Association


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https://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/Q3%202011%20MoneyTree%20Report.pdfhttps://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/Q3%202011%20MoneyTree%20Report.pdf


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Venture Capital 1980 2009https://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/Q3%202011%20MoneyTree%20Report.pdf


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https://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/Q3%202011%20MoneyTree%20Report.pdfhttps://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/Q3%202011%20MoneyTree%20Report.pdf

Quarter 3, 2011


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“PricewaterhouseCoopers & Entrepreneur’s VC 100.” https://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/Q3%202011%20MoneyTree%20Report.pdfEntrepreneur, July 2001

http://www.pwcmoneytree.com/exhibits/2004_Entrepreneur_VC_100.pdf


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http://www.pwcmoneytree.com/exhibits/SmallBusinessSuccessMag-Fall-2004.pdfhttp://www.pwcmoneytree.com/exhibits/SmallBusinessSuccessMag-Fall-2004.pdf

2004


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Where Does VC Money Go?http://www.pwcmoneytree.com/exhibits/SmallBusinessSuccessMag-Fall-2004.pdf

Quarter 3, 2011


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https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=regionhttp://www.pwcmoneytree.com/exhibits/SmallBusinessSuccessMag-Fall-2004.pdf


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https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industryhttps://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


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https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=stagehttps://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


Let s visit some vc firms l.jpg

Let’s Visit Some VC Firmshttps://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


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http://www.bhti.com.cn/https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


Http www garage com l.jpg
http://www.garage.com/https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry

Guy Kawasaki


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1999https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


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2005https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


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Europe Teamhttps://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry

Silicon Valley

Team

Israel Team


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http://www.benchmark.com/people/https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


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1999https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry

Alventive Design-to-order products through its online community.

Ariba Business-to-business electronic commerce solutions. Ticker: ARBA

BridgeSpan Settlement services for the real estate industry. Collab.net

Open source softwaremarketplace.

Decision Point Systems Technology based pre-employment services.

E-Dr. Network E-commerce site serving eyecare professionals.

EmployeeSavings.com Leading provider of Internet-based work/life solutions.

eShop* Electronic commerce tools (acquired by Microsoft) Ticker: MSFT

Impresse B2B e-commerce network for commercial printing.

People Support Provider of comprehensive Internet customer care services and technologies.

TradeOut.com A global Internet marketplace for business surplus.

Vcommerce.com The leading provider of outsourced commerce on the Internet.


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http://www.benchmark.com/companies/https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


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Sequoia Capitalhttps://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry

  • Michael Moritz


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http://www.sequoiacap.com/china/energyhttps://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


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Draper Fisher Jurvetsonhttps://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry

  • Founder Tim Draper

  • Portfolio Companies

  • Owns 28.1% of Baidu.com

  • SkypeWebsite


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http://www.dfj.com/index.shtml#w2https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


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Kleiner Perkinshttps://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry

  • Maltese Falcon – 289 feet, 88 metres, $130 MM

Thomas James Perkins (born 1932)

American businessman, capitalist, and was

one of the founders of leading venture capital

firm Kleiner, Perkins, Caufield & Byers.


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http://kpcb.com/https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry


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http://investor.lululemon.com/secfiling.cfm?filingID=950123-07-10402http://investor.lululemon.com/secfiling.cfm?filingID=950123-07-10402


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http://venturebeat.files.wordpress.com/2011/11/groupon-infographic.pnghttp://venturebeat.files.wordpress.com/2011/11/groupon-infographic.png


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http://www.scribd.com/fullscreen/69309864http://venturebeat.files.wordpress.com/2011/11/groupon-infographic.png


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http://accel.com/company/index.phphttp://venturebeat.files.wordpress.com/2011/11/groupon-infographic.png


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Facebook pre IPO Ownershiphttp://venturebeat.files.wordpress.com/2011/11/groupon-infographic.png

  • Mark Zuckerberg: 24%,

  • Accel Partners: 10%,

  • Digital Sky Technologies: 10%,

  • Dustin Moskovitz: 6%,

  • Eduardo Saverin: 5%,

  • Sean Parker: 4%,

  • Peter Thiel: 3%,

  • Greylock Partners and Meritech Capital Partners: between 1 to 2% each,

  • Microsoft: 1.3%,

  • Li Ka-shing: 0.75%,

  • the Interpublic Group: less than 0.5%.

  • A small group of current and former employees and celebrities own less than 1% each,

  • including Matt Cohler, Jeff Rothschild, Adam D'Angelo, Chris Hughes, and Owen Van Natta, while Reid Hoffman and Mark Pincus have sizable holdings of the company.

  • The remaining 30% or so are owned by employees, an undisclosed number of celebrities, and outside investors including Goldman Sachs

http://en.wikipedia.org/wiki/Facebook


Angels l.jpg

Angelshttp://venturebeat.files.wordpress.com/2011/11/groupon-infographic.png

Informal Investors

Seed and Early Stage Investors


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http://www.sec.gov/answers/accred.htmhttp://venturebeat.files.wordpress.com/2011/11/groupon-infographic.png


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http://www.vfinance.com/http://venturebeat.files.wordpress.com/2011/11/groupon-infographic.png


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http://www.vfinance.com/ent/ent.asp?ToolPage=angelsearch_00.asphttp://www.vfinance.com/ent/ent.asp?ToolPage=angelsearch_00.asp


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http://techcoastangels.com/http://www.vfinance.com/ent/ent.asp?ToolPage=angelsearch_00.asp


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http://techcoastangels.com/for_entrepreneurs/screening-processhttp://techcoastangels.com/for_entrepreneurs/screening-process


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http://pasadenaangels.com/http://techcoastangels.com/for_entrepreneurs/screening-process


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http://www.gust.com/angel-group/pasadena-angelshttp://techcoastangels.com/for_entrepreneurs/screening-process


Exit strategies l.jpg

Exit Strategieshttp://techcoastangels.com/for_entrepreneurs/screening-process

Mergers, Acquisitions, IPO

Bankruptcy


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Be Acquired by Big Companyhttp://techcoastangels.com/for_entrepreneurs/screening-process

  • Google – 106 Acquisitionshttp://en.wikipedia.org/wiki/Google_acquisitions

  • Cisco Systems - 143 since 1993 http://en.wikipedia.org/wiki/List_of_acquisitions_by_Cisco_Systems


Exit more challenging l.jpg
Exit More Challenginghttp://techcoastangels.com/for_entrepreneurs/screening-process

  • The number of IPOs by venture-backed companies in the U.S. plummeted from 260 in 2000 to 13 in 2009

  • VC-backed M&A transactions dropped from 462 deals worth $99 billion (in disclosed values) in 1999 to 260 worth $12 billion in 2009.

  • Investors, meanwhile, have reduced their commitment to the industry, from $41 billion in 2007 to $15 billion in 2009 in the U.S.

Saying Goodbye: New Exit Strategies for Today's Venture Capitalists: Knowledge@Wharton

(http://knowledge.wharton.upenn.edu/article.cfm?articleid=2440)


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IPOs – Fewer and Biggerhttp://techcoastangels.com/for_entrepreneurs/screening-process

  • IPOs were once within reach of companies with annual revenues of between $30 million and $50 million, a few consecutive profitable quarters, a good management team, and good investment bankers and attorneys.

  • But this changed after the dotcom crash, and investors "wanted safety“ in large, very mature companies with revenues of $150 million or more. "That has really sort of been the market bar for the last seven years.”

Saying Goodbye: New Exit Strategies for Today's Venture Capitalists: Knowledge@Wharton

(http://knowledge.wharton.upenn.edu/article.cfm?articleid=2440)


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The Minimum Respectable Return on a VC Fund is 20% per yearhttp://techcoastangels.com/for_entrepreneurs/screening-process

  • A minimum 'respectable' return for a VC fund is 20% per year. This is set by the expectations of the investors in VC funds, the relative risk levels compared to other investment classes and the performance achieved by other venture capital fund managers.

  • Another way to look at this is that a ten-year venture capital fund needs to repay investors six times (6x) their investment.

  • This means that those two winner investments have to make a 30x return (on average) to provide the venture capital fund a 20% compound return – and that’s just to generate a minimum respectable return.

Basil Peters. Venture Capital Funds - How the Math Works. AngelBlog.

http://www.angelblog.net/Venture_Capital_Funds_How_the_Math_Works.html


Government programs l.jpg

Government Programshttp://techcoastangels.com/for_entrepreneurs/screening-process

SBA Loans, Subsidies and Grants


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http://www.sba.gov/category/navigation-structure/loans-grants/small-business-loanshttp://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans


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http://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans/sba-loan-programs/7a-loan-programhttp://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans/sba-loan-programs/7a-loan-program