Venture Capital, Private Equity, and the Financing of Entrepreneurship

by Lerner, Josh; Leamon, Ann; Hardymon, Felda

• ISBN13: 9780470591437
• ISBN10: 0470591439
• Edition: 1st
• Format: Hardcover
• Copyright: 2012-01-11
• Publisher: Wiley

Summary

This textbook will provide a comprehensive overview of the world of active investing. An introductory chapter will motivate the book and tell the story of the venture capital and private equity industries. The book follows the cycle of active investing. Raising funds, considering transactions, structuring and overseeing transactions, and exiting investments are considered in turn. The focus is not just on the U.S. market, but on the increasingly global nature of these activities. The book looks at active investors as businesses themselves and introduces the key features of these firms. How groups grapple with questions of scaling and internationalization and the disruptive impact of market cycles are among the topics considered. The book has two chapters looking at the impact of these funds: first, how the investments by these funds have performed, and then the broader consequences of these investments. The book also looks "into the crystal ball" and projects the future of active investing.

Author Biography

Josh Lerner is the Jacob H. Schiff Professor of Investment Banking at Harvard Business School, with a joint appointment in the Finance and Entrepreneurial Management Units. In the 1993-1994 academic year, Josh introduced an MBA elective course at Harvard Business School, "Venture Capital and Private Equity," which has been consistently one of the most popular elective courses at the School, and shortly thereafter an annual executive education course on private equity. The materials from the classes are collected in Venture Capital and Private Equity: A Casebook, now in its fourth edition.

Felda Hardymon is the MBA Class of 1975 Professor of Management Practice at the Harvard Business School and a career venture capitalist. He joined Bessemer Venture Partners (BVP) in 1981 and continues there as a Senior Partner. At Harvard Business School, Felda is the lead author of the VCPE Game, a large-scale, massively parallel simulation used to teach portfolio management in illiquid markets. He has served on the board of the National Venture Capital Association, where he was Chairman of the Tax Committee. Felda earned a B.S. from Rose Polytechnic Institute, a Ph.D. (mathematics) from Duke University, and an MBA (Baker Scholar) from Harvard Business School.

Ann Leamon is a Teaching Fellow at the Harvard Business School. She came to Harvard after six years as a senior business analyst at L.L. Bean and three years at Central Maine Power Company as a senior economic and load forecaster.?At Harvard Business School, Ann co-founded the Center for Case Development. She left that position to collaborate with Professors Lerner and Hardymon in the further development of the Venture Capital & Private Equity course. She holds a B.A. (Honors) in German from University of King's College/Dalhousie, an M.A. in Economics from University of Montana, where she studied urban redevelopment, and an M.F.A. in Poetry from the Bennington Writing Seminars.

Table of Contents

Preface

Acknowledgements

About the Authors

Introduction

The Private Equity Cycle - Fund Raising & Fund Choosing

Deal Sourcing and Evaluation - Not as Easy as it Looks

Assigning Value

Deal Structuring - Private Equity Securities and Their Motivation

After the Money Arrives?

Getting Liquid: Exits and Distributions

The Globalization of Venture Capital and Private Equity

Risk and return

The Impact of Private Equity on Society - Does This Really Matter Anyway?

People, Positions and Culture: The Management of the Private Equity Firm

Scaling and Institutionalization

Boom and Bust

Wrapping Up

Glossary

Index

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