Dream makers and deal breakers: inside the venture capital industry
Saved in:
| Main Author: | |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Englewood Cliffs, NJ
Prentice-Hall
1991
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| Subjects: | |
| Online Access: | Inhaltsverzeichnis |
| Physical Description: | XXIV, 215 S. |
| ISBN: | 0139340351 |
Staff View
MARC
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| adam_text | Contents
PREFACE xvii
ACKNOWLEDGMENTS xxiii
Part I: The Role of Venture Capital in Our Economy 1
CHAPTER 1: VENTURE CATALYSTS AND VULTURE
CAPITALISTS 3
An Entrepreneurial Economy 4
The Role of the Entrepreneurial Economy
in Creating Employment, 4
The Entrepreneurial Economy Pervades in
High Tech and Low Tech Industries, 5
Some high tech success stories, 5
Is high growth synonymous with high
tech?, 6 Retailing, 8 Franchising, 10
The Impact of Entrepreneurial Growth 11
Is High Growth Good?, 11
Creating industries, 11 Changing
bureaucracy, 12 Creating personal
wealth and success, 12 Enhancing
corporate reputation, 13 Developing
innovative products and services, 14
Impacting on larger companies, 14
Creating spin offs and new start ups, 14
Problems with High Growth, 15
vii
viii Contents
What Factors Account for Entrepreneurial
Growth? 16
Knowledge and Education, 17
The university s role, 17 Technological
growth, 17
Social and Demographic Trends, 18
Aging population, 18 Dual career
households, 18 Baby boomers, 19
Venture Catalysts: Providing the Fuel to
Generate Growth, 19
Venture capital is more than just capital, 20
Vulture capitalists , 21
A Look Ahead 24
CHAPTER 2: GREAT MOMENTS IN VENTURE CAPITAL 26
Early History 26
The Early Developments of Venture Capital,
26
The Emergence of Venture Capital in
America, 27
Building a Mega corporation, 27
Funding from Wealthy Families, 27
.. And from Corporations, 28
Post World War II Developments 28
The Development of the Formal Venture
Capital Industry, 28
Investments in Technology, 28
From Haloid to Xerox, 28 Fairchild,
Memorex, and their offspring, 29
The Formation of Small Business
Investment Companies (SBICs), 30
Recent Developments 31
More Venture Capital Firms Enter the
Picture, 31
But eventually fail, 31
The Resurgence of the Venture Capital
Industry, 31
A Look Ahead 32
CHAPTER 3. VENTURE CAPITAL AND ITS IMPACT 33
What Is Venture Capital? 34
The Primary Use of Venture Capital: For
Emerging Growth Businesses, 34
A Broader Spectrum of Venture Capital, 35
Stages of financing, 35
Contents jx
The Impact of Venture Capital 37
Venture Capital s Impact on
Entrepreneurial Growth and Success, 37
The influence of Georges Doriot, 38
Enhancing Doriot s principles, 40
The experience of venture
capitalists 41
Venture Capital s Impact on Economic
Development, 43
The GAO study, 44 Indirect effects of
venture capital investments, 45
A Look Ahead 46
Part II: The Key Players in the Venture Capital Industry 47
CHAPTER 4: THE VENTURE CAPITAL INDUSTRY 49
The Formal Venture Capital Industry 49
Venture Capital Firms, 49
Structure and fee arrangement of venture
capital firms, 49 Venture capital firms
versus mutual funds, 50 Time
demands of venture capitalists, 50
The Size of the Venture Capital Industry, 51
The Size of the Individual Venture Capital
Firms, 51
Venture capital firms are becoming even
larger, 52 Amount of capital raised by
venture capital firms, 53 The most
active venture capital firms: The venture
capital 100 , 53
Nature of Investments, 54
Geographic Concentration, 55
California, 56 Massachusetts, 56
New York, 57 Other regions, 57
Locations for business growth, 57
Investments Based on Stage of
Development, 58
Changes in investment philosophy, 58
Seed/Start up investments, 59 LBO
investments, 59
The informal venture capital industry 61
Angels , 61
Angel networks, 61
The Impact of Informal Investors, 62
A large pool available for start up capital, 62
A Look Ahead 63
x Contents
CHAPTER 5: VENTURE CAPITAL FIRMS AND OTHER
INVESTORS 64
Structure of the Venture Capital Industry 64
Private Independent Venture Capital
Partnerships, 65
Private Small Business Investment
Companies (SBICs), 66
Minority enterprise small business investment
companies (MESBlCs), 67
Public Venture Capital Companies, 68
Venture Capital Subsidiaries of Large
Corporations, 68
Benefits to the corporate venture
capital, 68 Benefits to the emerging
growth company, 70 Investing in
employees, 70 Collaborative
arrangements, 71 Some problems
associated with corporate venture capital, 71
Keys to successful corporate venture
capital programs 72
State Venture Capital Funds, 73
A comparison of the programs, 73
The impact of state supported programs, 73
Tax incentives, 74
University related Incubators, 74
The role of private venture capital in
university research efforts, 75
Private Sector Incubators, 75
Investment Banking Firms, 75
Boutiques, 76
Syndication 76
A Look Ahead 77
CHAPTER 6: INVESTORS IN VENTURE CAPITAL FUNDS 78
Sources of Funding 78
Pension Funds, 79
The increase in pension fund
investments 80
Direct loans by pension funds, 81
Foreign Investments, 81
Corporate Investments, 81
A Look Ahead 82
Contents xi
Part III: The Venture Capital Process 83
CHAPTER 7: AN INTRODUCTION TO THE VENTURE CAPITAL
PROCESS 85
How Do Venture Capitalists Make Investment
Decisions? 86
CHAPTER 8: DEAL ORIGINATION 87
Leads to Venture Capitalists 88
Zeroing in on the Right Investor, 88
Establishing Appropriate Linkages, 89
Venture Capital Fairs, 89
Proactive Attempts by Venture
Capitalists, 89
Examples of proactive methods, 89
A Look Ahead 90
CHAPTER 9: DEAL SCREENING AND EVALUATION 91
The Venture Proposal Screening Process 91
How Venture Capitalists Screen
Proposals, 91
Evaluating the Venture Capital Firm, 92
What Is the Likelihood of Receiving
Venture Capital Funding?, 92
What Factors Do Venture Capitalists
Consider When Making Investment
Decisions?, 93
Turn ons and Turn offs 93
The Investor s Perspective, 93
A matter of A s, B s and C s, 94
Turning Venture Capitalists on, 94
Definition of the business, 95 Marketing
capabilities, 97 Management capabilities,
100
Financial arrangement 107
Turning Venture Capitalists off, 110
Prepackaged package, 110 Product
orientation, 110 Unrealistic financial
projections, 111 Failure to examine
risks, 111
A Look Ahead 111
xii Contents
CHAPTER 10: DEAL STRUCTURING 113
How Deals Are Structured 113
Alternative Methods of Financing, 113
Founder s Stock, 114
Hybrid Forms of Financing, 114
Debt with Warrants, 114 Equity Kicker
Financing by Banks, 114 Stocks with
Warrants, 115
Venture Lessors, 115
Innovative Financing, 115
The Actual Structuring of the Deal 116
Provisions of the Venture Agreement, 116
What s the Business Worth?, 117 What s
the Equity Position for the Venture
Capitalist?, 118
VCsAreVC, 119
An Example, 119
Do Venture Capitalists Want to Control the
Business?, 120
Negotiation, 120
Importance of the Deal, 121
Securities Laws 121
Regulation D, 121
1244 Stock, 122
A Look Ahead 123
CHAPTER 11: POSTINVESTMENT ACTIVITY 124
Exit Routes 124
Going Public versus Other Exit Routes, 125
Initial Public Offerings 125
The Importance of Timing When Cashing
Out, 125
The Mad Rush for IPOs, 126
Failure Follows Success, 127
IPOs: The Pros and Cons, 128
Corporate Acquisitions 129
Corporate Acquisitions in Biotechnology, 129
A Look Ahead 130
Contents xjjj
Part IV: Nature and Performance of Venture Capital Investments 133
CHAPTER 12: NATURE OF VENTURE CAPITAL INVESTMENTS 135
Preferred Investments by Venture
Capitalists 135
1985 JEC Study, 135
Recent trends in venture capital investments, 136
Traditional Venture Capital?, 137
Trend Toward Specialization 138
In Support of the JEC Study, 138
The Alternative View: Specialization, 138
A niche economy, 138 A niche economy
results in specialization among venture capitalists, 138
Liberal Exception Policy, 139
Specialization by Region 140
Investing in Companies in Low tech, Low
growth Regions, 140
Regional Economic Development, 141
Specialization by Industry 142
Computers and Office Automation, 142
The decline of investments in computer, 142
Health Care and Biotechnology, 143
Health care, 143 Biotechnology, 145
Telecommunications, 147
Specialization among venture capital firms, 147
Environmental Concerns, 148
Retailing, 148
Some success stories in retailing, 148
IPOs of specialty retailers, 149 Belts
and bats, 149 Office products, 150
Venture capital firms investing in retailing, 151
Franchising, 151
Venture capitalists investing in franchise
operations, 151 Zoors and Zees , 152
Specialization by stage of development 152
Seed Capital, 152
Less money going into seed capital, 153
Risk and return for seed investments, 153
Some successful venture capital firms still
target early stage ventures, 154 Role of
the smaller venture capital firms, 154
Feeder funds, 155
xiv Contents
Mezzanine Financing, 156
Turnaround Venture Capitalists, 156
The nature of the turnaround deal, 157
Leveraged Buy outs, 157
What are LBOs, 158 Exit vehicles for
LBOs, 158 Types of LBOs, 159
Pros and cons of LBOs, 161
Downsizing versus consolidation, 162
LBO deals, 163
A Look Ahead 164
CHAPTER 13: PERFORMANCE OF VENTURE CAPITAL
INVESTMENTS 165
Performance of Selected Investments 165
Success Stories of Venture Capital
Firms, 166
Kleiner Perkins Caufield Byers, 166
Sevin Rosen, 166 Arthur Rock, 166
Allen Co., 167 Hambrecht Quist, 167
TA Associates, 167 Some others, 167
And Failures, 167
The Performance of the Portfolios of Venture
Capital Firms 168
What Returns Haue Been Realized by
Venture Capital Firms?, 169
Comparative returns over time, 169 The
performance of selected venture capital
firms, 170 A related concern, 170
What Affects Portfolio Returns?, 171
How Has the Performance of Venture
Capital Funds Compared to that of
Publicly Traded Companies?, 171
Haue Returns on Investment Been in Line
with Investor Expectations?, 173
The Current Situation, 173
A Look Ahead 174
Part V: Selected Topics 175
CHAPTER 14: FOREIGN VENTURE CAPITAL 177
Venture Capital in Europe 178
An Overview, 178
The size of the venture capital industry in
Europe, 178 The nature of the venture
capital industry in Europe, 178 Types
of investments, 179
Contents xv
United Kingdom, 180
France, 181
Germany, 181
Netherlands and Belgium, 182
Scandinavia, 182
Some General Comments about Venture
Capital in Europe, 183
Venture Capital in the Middle East 183
Israel, 183
Venture Capital in the Far East 184
Japan, 184
Nature of investments, 184 Investing in
U.S. and European companies, 185
The Four Tigers , 187
Networks 187
Global Networks: A Developing Trend, 187
The Key Players and Their Investments,
188
A Look Ahead 188
CHAPTER 15: CURRENT ISSUES 190
Economic and Public Policy Issues 190
Capital Gains Tax Rate and Tax Reform,
190
The generally accepted relationship between
tax rates and venture capital, 190
Opposing viewpoints, 192 The current
situation and future prospects, 193 Is
the impact overstated?, 194 Some
other effects of tax reform, 194
Other Related Issues 195
Venture Capital after the Crash, 195
IPOs before and after the crash, 195
Positive developments, 196 Impact on
the entrepreneurial companies, 197
Some examples, 197
A Look Ahead 198
CHAPTER 16: SOME CLOSING THOUGHTS 199
INDEX OF COMPANIES AND ENTREPRENEURS 203
INDEX OF VENTURE CAPITALISTS 210
SUBJECT INDEX 214
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| spelling | Schilit, W. K. Verfasser aut Dream makers and deal breakers inside the venture capital industry W. Keith Schilit Englewood Cliffs, NJ Prentice-Hall 1991 XXIV, 215 S. txt rdacontent n rdamedia nc rdacarrier Venture capital United States Risikokapital (DE-588)4124067-4 gnd rswk-swf USA Risikokapital (DE-588)4124067-4 s DE-604 HBZ Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=003403257&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis |
| spellingShingle | Schilit, W. K. Dream makers and deal breakers inside the venture capital industry Venture capital United States Risikokapital (DE-588)4124067-4 gnd |
| subject_GND | (DE-588)4124067-4 |
| title | Dream makers and deal breakers inside the venture capital industry |
| title_auth | Dream makers and deal breakers inside the venture capital industry |
| title_exact_search | Dream makers and deal breakers inside the venture capital industry |
| title_full | Dream makers and deal breakers inside the venture capital industry W. Keith Schilit |
| title_fullStr | Dream makers and deal breakers inside the venture capital industry W. Keith Schilit |
| title_full_unstemmed | Dream makers and deal breakers inside the venture capital industry W. Keith Schilit |
| title_short | Dream makers and deal breakers |
| title_sort | dream makers and deal breakers inside the venture capital industry |
| title_sub | inside the venture capital industry |
| topic | Venture capital United States Risikokapital (DE-588)4124067-4 gnd |
| topic_facet | Venture capital United States Risikokapital USA |
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