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Chapter 1

Chapter 1. Introduction to Venture Capital. What is a VC?. (1) A VC is a financial intermediary , meaning that they take the investors’ capital and invest it directly in portfolio companies .

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Chapter 1

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  1. Chapter 1 Introduction to Venture Capital

  2. What is a VC? (1) A VC is a financial intermediary, meaning that they take the investors’ capital and invest it directly in portfolio companies. (2) A VC will only invest in private companies. This means that once the investments are made, the companies cannot be immediately traded on a public exchange. (3) A VC takes an active role in monitoring and helping the companies in his portfolio. (4) A VC’s primary goal is to maximize his financial return by exiting investments through a sale or an initial public offering (IPO). (5) VCs invest in order to fund the internal growth of companies.

  3. Portfolio Companies VC Funds Managed by General Partners (“VCs” or “GPs”) “Exits”: Sale of Portfolio companies to public markets (IPOs)or to other companies Limited Partners (Investors or “LPs”) THE FLOW-OF-FUNDS IN THE VENTURE CAPITAL CYCLE

  4. Venture Capital Buyout ALTERNATIVE INVESTMENTS Private Equity Mezzanine Distress Hedge Funds

  5. What Do VCs and Buyout Firms Do? Investing Monitoring Exiting

  6. Private Equity • Illiquid investments • Who should invest in illiquid assets?

  7. Chapter 2 The VC Players

  8. Investment, Pre-Boom

  9. Investment, Boom and Post-Boom

  10. Stages of Growth • Early-Stage • Seed • Startup • Other Early-Stage • Mid-Stage (expansion) • Late-Stage • Generic Late Stage • Bridge/Mezzanine

  11. Investment by Stage

  12. Investment by Industry

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