麦肯锡：风险投资Venture Capital – Industry Overview and Ec

March5,1997PROPRIETARYFIRESTER,JONATHAN–NY/NYANSLINGER,PATRICIA–NY/NYThisreportcontainsinformationthatisconfidentialandproprietarytoMcKinsey&CompanyandissolelyfortheuseofMcKinsey&Companypersonnel.Nopartofitmaybeused,circulated,quoted,orreproducedfordistributionoutsideMcKinsey&Company.Ifyouarenottheintendedrecipientofthisreport,youareherebynotifiedthattheuse,circulation,quoting,orreproducingofthisreportisstrictlyprohibitedandmaybeunlawful.VentureCapital–IndustryOverviewandEconomics11.Venturecapitalindustryoverview2.Segmentationofventurecapitalfirms3.Forcesatworkandbestpractices4.Economicsofaventurecapitalfirm5.Maindatasources2Description&ValueAdded•Relativelysmallamountofcapitalprovidedtoanentrepreneurtoproveaconcept•Financingprovidedtocompaniesforuseinproductdevelopmentandinitialmarketing•Financingprovidedtocompaniesthathaveexpendedtheirinitialcapitalandrequirefundsforsalesandmanufacturing•Workingcapitalfortheinitialexpansionofacompanythatisproducingandshippingbutmaynotyetbeshowingaprofit•Fundsprovidedforthemajorgrowthofacompanywhosesalesareincreasingandthatisbreak-evenorprofitable•Financingforacompanyexpectingtogopublicwithinsixtotwelvemonths•Fundsprovidedtoenableoperatingmanagementtoacquireaproductlineorbusiness•FinancingprovidedtoacompanyatatimeofoperationalorfinancialdifficultywiththeintentionofturningthecompanyaroundComments•Mayinvolveproductdevelopment,butrarelyinitially•Companiesmayhavebeeninbusinessashorttime•Fundsareforexpansion,marketing,etc.•OftenbridgefinancingisstructuredsothatitcanberepaidfromproceedsofanIPOThedifferenttypesofprivateequitycanbeorganizedaccordingtowheretheyapplyinacompany'slifecycle.Venturecapitalreferstoearlyandexpansion-stagefinancing.Source:VentureEconomicsInvestorServicesAnnualReview;Pratt'sGuidetoVentureCapitalVENTURECAPITALFINANCINGSTAGESSeedStartupFirstStageSecondStageThirdStageBridgeStageManagementBuyoutWorkoutTurnaroundEarlystageExpansion3HISTORICALPERSPECTIVEInfancyandinitialgrowth(pre-1965)Weedingout(1965-80)Rapidgrowth(1980-89)Concentrationandspecialization(1990-)Description•Firstprivatefirmformedin1946(AmericanResearchandDevelopment)•FocusonmanagingwealthyAmericans'moneyandprimarilyfundingnewventures•GovernmentauthorizedSmallBusinessInvestmentCorporations(SBICs)in1958-722SBICsby1964(federallyguaranteedriskcapital)•Annualventurecapitalinvestmentlessthanfewhundredmilliondollars•ToomanySBICs–Short-termorientation–Excessiveregulation–Nomanagementdisciplineandexperience•WeedingoutofSBICs•PrivateVCsentertoovercomestructuralproblemsofSBICs•DigitalEquipmentCorporationisamajorsuccessstory(10,000%return)forARD•Corporationsandfinancialinstitutionsbeginenteringmarket•1979amendmenttoprudentmanruleallowspension•ClarificationofERISAleadstoincreasedpensionfundinvestment•Successstories–Apple,Compaq,etc.;entrepreneurismis“hip”•Industrygoesintoanotherdowncycleandconsolidationbeginsinlate1980s•Riseofgate-keepers,advisorstoinstitutionalinvestmentmanagers•Industryconsolidationweedsoutweakerplayers•Stronggetstrongerandattractmoremoney•Focusisonnewventures,supportingexistingones,LBOsandalsobuyingandsellingsmall/mediumcompanies•Playersinclude–Independentfirms–Corporateindustrialgroups–Financialinstitutions–SBICstolessextentVenturecapitaldevelopedintheU.S.inthelate1940s.Theindustryhasmaturedandiscurrentlyinthemidstofaconcentrationandspecializationphase.Source:McKinseyOverviewoftheVentureCapitalIndustry11/16/95;HarvardBusinessSchoolVentureCapitalWhitePaperIndustryphase4$1215182023242526293337198586878889909192939495U.S.Venturecapitalundermanagement*SIZEANDGROWTHOFU.S.VENTURECAPITALINDUSTRY$Billions*IndependentprivateventurecapitalfirmsonlySource:VentureEconomicsInvestorServicesAnnualReviewRecently,venturecapitalundermanagementintheU.S.hasgrownatanaveragerateof12percent.Globalforcesatworkpointtocontinuedgrowthinthenearfuture.CAGR12%•Substantialgrowthopportunitiesremainintraditionalventurecapitalindustriessuchashigh-technology,healthcare,software,etc.•StrongventurecapitalgrowthbeginninginEuropeandAsia•Easierglobalmovementofcapital,newideasandbesttechniquesofproductionarecreatingmoreopportunities•Acceleratingdemandbyinstitutional,privateandcorporateinvestorsOutlookforcontinuedgrowthRapidgrowthConcentration&specialization5$2.33.34.22.92.41.81.32.52.53.84.22.73.24.03.83.41.91.32.53.12.73.919851986198719881989199019911992199319941995Commitments&disbursements*SIZEANDGROWTHOFVENTURECAPITALINDUSTRY(CONTINUED)$Billions*IndependentprivateventurecapitalfirmsonlySource:VentureEconomicsInvestorServicesAnnualReviewNewcapitalcommitmentsDisbursementstoportfoliocompaniesInflowsandoutflowsfromventurecapitalfundshavebeencyclical.Thedisbursementcyclelagsthecommitmentcycleasfirmshaveattemptedtoevenoutportfoliocompanyinvestments.6SIZEANDGROWTHOFGLOBALVENTURECAPITALINDUSTRYSource:EVCAYearbooks;VentureEconomics;AsiaVentureCapitalJournal;GuideToVentureCapitalInAsia;McKinseyestimates$3,7651,3951,27777060538135731324222416113913310973654846UnitedStatesUnitedKingdomFranceCanadaJapanItalyGermanyNetherlandsAustraliaIrelan