Venture Capital 风险投资 lecture notes

FIN310-VentureCapital-InvestinginearlystagegrowthcompaniesMacquarieCapital–ElmarBroscheitMacquarieCapitalElmarBroscheit19March2011ContentsContents1.Introductiontoventurecapital—Whatisventurecapital?—Howdoesitoperate?—WhoarethemainplayersgloballyandinAustralia?—And…thedifferencebetweenventurecapitalandLeverageBuy-out(LBO)privateequity2.Investinginearly-stagegrowthcompanies—Whatdoventurecapitallookfor?—Howdotheyexecuteondeals?A1MacquariecasestudiesA1.Macquariecasestudies—Seek,Zhaopin,JobsDB—RPData—ATMSolutionsA2.VentureCapitaltrends—WhatareVCslookingintotoday?STRICTLYCONFIDENTIAL2A3.FurtherreadingmaterialsMyExperienceatMacquarieMyExperienceatMacquarieMacquarie’stechnologyinvestmentteamhasestablishedastrongtrackrecordofinvestingingrowthcompaniesoverthepastdecade“Helping—Hasachievedoutstandingreturnswithover20investmentsingrowthcompanies(70%IRR)—Broadgeographicfocus,withkeystrengthsinAsia,specificallyChina—KeyfocusonpartneringwithentrepreneursduringthegrowthphaseEntrepreneursGrowGreatCompanies…”TargetInvestmentsGrowthCompaniesApproach„TargetinvestmentsintherangeofUS$20toUS$100million„Aimtoachieve3xoninvestmentsTargetInvestments–GrowthCompanies„OurapproachistoactivelyengagewiththeFounders,EntrepreneursandManagementofourinvesteecompanies„Thismeansweaccruevalueonacompany-by-companyApproach„Averageinvestmentperiodis3years„Wedonottakeaportfolioapproach„Weseektofocusonselectfewinvestmentsandmakeeveryonesuccessfulbasis,byactivelyparticipatinginstrategicdevelopmentandexecution–throughasustainablealignmentofinterestbetweenusandthemanagementteam„Wedothisbyleveragingourcollectiveexpertise,network,industryandfinancialmarketknowledge,andinvolvingl‘’fhSTRICTLYCONFIDENTIAL3ourselvesas‘partners’ofthemanagementteamMyExperienceatMacquarieMyExperienceatMacquarieINVESTMENTFOCUS–TECHNOLOGYLEVERAGEDOREMERGINGGROWTHCOMPANIESOnline/newmediaDataservicesIT&softwareEducation/trainingPaymentsOutdooradvertisingSTRICTLYCONFIDENTIAL4ItdtitVtCitlIntroductiontoVentureCapitalSTRICTLYCONFIDENTIAL5WhatisVentureCapital?WhatisVentureCapital?„Venturecapitalisfinancialcapitalprovidedtoearly-stage,high-potential,high-risk,high-growth,start-upcompanies—Suchcompaniesaregenerallytooriskyandhavelimitedoperatinghistoryforstandardcapitalmarketsorbankloans„Venturecapitalcanalsoincludemanagerial,technicalexpertiseandothervalue-addedservices„Venturecapitalistspoolfundingfromsourcessuchasindividuals,investmentbanksandfinancialinstitutionsandinvestthroughaprofessionally-managedfund„Fundingisoftenprovidedinstages,providingsufficientcapitaltoreachthenextmilestoneSourcesoffundsMaturityVenturecapitalfirms&corporateinvestorsBanksProfitRapidgrowthExpansionIPO,acquisitionRolloutGestationInceptionSTRICTLYCONFIDENTIAL6TimePrototypeFoundersAngelfinancingWhatistheTypicalSetupforaVC?WhatistheTypicalSetupforaVC?„Venturecapitalfirmsraisefundsfrominvestors,andusethesefundstoinvestinaportfolioofinvestments„Venturecapitalfirmsearnfeesformanagementofcommittedfunds(typically2.5%)and‘carry’oninvestmentperformance(e.g.20%above8%)LimitedPartners(Investors)(publicpensionfunds,corporatepensionfunds,insurancecompanies,highnet-worthindividuals,familyoffices,endowments,foundations,fdffdilthfdt)VentureCapitalFirm(GeneralPartner)fund-of-funds,sovereignwealthfundsetc)OwnershipofthefundVentureCapitalFund(LimitedPartnership)Fund/InvestmentManagementOwnershipofportfolioinvestmentsInvestmentInvestmentInvestmentOwnershipofportfolioinvestmentsSTRICTLYCONFIDENTIAL7TheLifecycleofaVCFundTheLifecycleofaVCFundFundRaising„Typicallytakessixmonthstoayeartoobtaincapitalcommitments„Capitalcancomefromstateandcorporatepensionfunds,publicandprivateendowmentsandpersonalinvestors1.SourceInvestments„Cantakebetweenthreeandsixyearsandiscomprisedof:—Sourcinginvestments:identifyandsourceopportunities—Duediligence:extensiveresearchandanalysisisdoneonthecompanyandinthemarketitoperatesin2.Duediligence:extensiveresearchandanalysisisdoneonthecompanyandinthemarketitoperatesin—Initialinvestment—Often,venturecapitalfirmspreserveanappropriatepercentageoftheirfundstoparticipateinfollow-onfundraisingsfortheirportfoliocompaniesPortfolioManagement„Theaimofthisstageistohelptheportfoliocompaniesgrow„Venturecapitalfirmstypicallyappointrepresentativesonthecompany’sboardandoffersstrategicadvicetothemanagementteam3.Closing„Oftenfundsare10yearclosed-endfundsinwhichitisexpectedthatallfundinvestmentswillberealisedandthefundswoundsupin10years„Bytheexpirationdateofthefundtheventurecapitalfirmshouldhaverealiseditspositioninallofitsportfoliocompanies4.STRICTLYCONFIDENTIAL8„Bytheexpirationdateofthefund,theventurecapitalfirmshouldhaverealiseditspositioninallofitsportfoliocompanies„RealisationbywayofIPO,saletoathirdparty(egtradesale)orwind-upHowdoVC’sCreateValue?HowdoVCsCreateValue?Howdoventurecapitalistsaddvalue?„Network:providinganetworkofpotentialclientsandpartnerstohelpbuildrelationships„Recruitment:assistingandidentifying,interviewingandassessingtalentforthebusinessandfortheBoard77%Network„Financing:assistinraisingadditionalequity,debtorl