Venture Capital（三十）.pptVIP

Venture Capital What is Venture Capital? Ownership, or convertible to ownership, capital High Risk capital Investors are ‘active’ rather than passive Typically add other value Contacts Expertise Types of Venture Capitalists Public and private venture capital firms Small Business Investment Companies (SBIC) and Minority Enterprise SBIC’s (MESBIC) Corporate Venture Capital Publicly traded VC funds (mutual funds) Public Private VC Firms Usually limited partnerships Seek other VC investments from institutions Tend to specialize based on: Industry Stage of development Territory SBIC / MESBIC Created in 1958 by Small Business Investment Act Expanded in 1972 to include minority enterprise SBIC National program for licensing privately-owned small business investment cos Eligible for government loans (SBA) Corporate VC Divisions of a major corporation A joint-venture between corporation and the smaller company Smaller company has research or resources that the larger company needs Smaller company gets access to the resources of the larger company Corporate VC Fastest growing segment 49 companies in 1996; 200 in 1999 accounting for 15% of total VC Example: Intel $8B Others: ATT, Motorola, Lucent, Nokia, IBM, Microsoft, EDS Preparing for VC’s Well written business plan and financing proposal Amount and use of proceeds Networking Unsolicited proposals are numerous and unlikely to get fair shake Simply trying to get considered Preparing for VC’s What are Venture Capital preferences? Geographic location Types of products and services Risk and rates of return Amount of capital needed Stage of development VC Stages Seed financing Product development Market research Product feasibility Start-up or early stage Completion of product development Recruitment of management team Completion of business plan begin marketing VC Stages First-stage Full-scale manufacturing Completion of management team Second-stage Production and distribution begun Established inventory accts receivable