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• Cover
• Title Page
• Copyright
• Dedication
• Foreword
• Preface
• WHY SHOULD YOU READ THIS BOOK?
• AND WHO AM I TO WRITE THIS BOOK?
• WHAT SHOULD YOU KNOW ABOUT THIS BUSINESS OF VENTURE CAPITAL?
• NOTES
• Acknowledgments
• Part One: The Making of a VC
• 1 The Business of Cash and Carry
• INTRODUCTION: AN OPERATIONAL PRIMER
• ROLES, RESPONSIBILITIES, AND COMPENSATION
• NOTE
• 2 Why Choose a Career in VC
• CREATIVE CONSTRUCTION
• INTELLECTUAL STIMULATION
• MENTOR CAPITALISTS
• ASYMMETRICAL REWARDS
• NOTES
• 3 Attributes of Successful VCs
• STRONG AWARENESS OF TECH TRENDS
• ABILITY TO PICK WINNERS
• OPTIMISM, PATIENCE, AND STABILITY
• ABILITY TO LEARN AND GROW
• AN INHERENT BIAS FOR ACTION
• 4 Welcome to the Land of Ad-Venture
• ROLES AND RESPONSIBILITIES OF A VC
• INTERNSHIPS AND CAMPUS RECRUITMENT
• THE FELLOWSHIP OF INVESTORS
• ADJACENT ENTRY POINTS
• GETTING LUCKY — WHEN OPPORTUNITY MEETS A PREPARED MIND
• NOTES
• 5 Developing Your Investment Career
• BUILDING YOUR STRENGTHS
• BEWARE: BIAS AND PSYCHOLOGY
• NOTES
• 6 A Business Where Enemies Accumulate
• CHALLENGES OF A VC CAREER
• VC CAREER AS A CALLING
• NOTES
• 7 Generational Transfer and Succession
• MANAGING SUCCESSION – NOW MY WORK IS DONE
• THE ART OF LETTING GO
• NOTE
• Part Two: Raising Your Venture Fund
• 8 LP Universe
• PENSION FUNDS
• ENDOWMENTS AND FOUNDATIONS
• SOVEREIGN WEALTH FUNDS
• FINANCE AND INSURANCE COMPANIES
• FAMILY OFFICES AND HIGH-NET-WORTH INDIVIDUALS
• CORPORATE OPERATING FUNDS
• COMPARISON OF LIMITED PARTNERSHIPS
• NOTES
• 9 LPs of Choice: Fund of Funds
• ADVANTAGES OF A FUND OF FUNDS
• FUND OF FUNDS INVESTMENT STRATEGIES
• 10 How LPs Conduct Fund Due Diligence
• PRIMARY AND SECONDARY INVESTMENT CRITERIA
• FUND SELECTION CRITERIA
• NOTES
• 11 Defining Your Fund’s Investment Strategy
• MARKET OPPORTUNITY
• COMPETITIVE ADVANTAGES
• CASE STUDY: SOLO GP GOES INSTITUTIONAL
• CASE STUDY: OVERSUBSCRIBED FIRST FUND — HOW A $30M FUND ENDED UP WITH OVER $100M IN COMMITMENTS
• CASE STUDY: STARTING ALL OVER…
• CASE STUDY: WHO HAS TIME FOR THIS? I DON’T NEED NO LPS ANYMORE…
• NOTES
• 12 Investment Team Diligence
• EVALUATING FUND MANAGERS
• TEAM DYNAMICS: STABILITY, SKILL SET, AND ALIGNMENT
• NOTES
• 13 Fund Size and Portfolio Construction
• NOTES
• 14 Performance Analysis
• INDIVIDUAL PERFORMANCE AND ATTRIBUTION
• PUBLIC MARKET EQUIVALENTS
• FUND-LEVEL PERFORMANCE
• MEASURING REALIZED RETURNS
• SELF-SELECTION BIAS: GIANTS AMONG MIDGETS
• NOTES
• 15 Terms of Fund Investment
• KEY TERMS
• FUND FINANCIAL TERMS
• FUND GOVERNANCE TERMS
• WHAT INSTITUTIONAL LPs SEEK
• OFFERING SWEETENERS TO ATTRACT LPs: A DOUBLE-EDGED SWORD
• MOST NEGOTIATED LP–GP TERMS
• WHY LPs TERMINATE EXISTING RELATIONSHIPS
• NOTES
• 16 The Venture Firm’s Ethos, Culture, and Values
• ETHOS
• CULTURE AND VALUES
• GOVERNANCE OF THE FIRM
• NOTES
• 17 Raising Your First Fund
• FIRST STEPS
• TARGETING LPs
• MARKET TIMING
• FIT WITHIN THE LP’s CURRENT PORTFOLIO
• NOTES
• 18 The Fundraising Roadshow
• OVERVIEW: THE FUNDRAISING PROCESS
• GETTING IN THE LP DOOR
• LOCKING YOUR ANCHOR INVESTOR
• SELL, SELL, SELL
• SHOULD YOU WAREHOUSE PORTFOLIO COMPANIES?
• YOUR BIGGEST FUNDRAISING RISKS, AND HOW TO MANAGE THEM
• NOTES
• 19 Why LPs Seek First-Time Funds
• CREATIVITY, HUNGER, AND PERFORMANCE
• RANKING EMERGING MANAGERS
• A FUTURES OPTION
• NOTES
• 20 Sourcing Investment Opportunities
• OVERVIEW: THE SOURCING PROCESS
• PROACTIVE SOURCING
• NETWORK-BASED SOURCING
• ACCELERATORS
• ANGEL NETWORKS
• COMMERCIALIZING UNIVERSITY RESEARCH
• CORPORATE RESEARCH
• TRADE CONFERENCES
• INVESTOR PITCH SESSIONS
• THE AGONY OF MISSED OPPORTUNITIES
• NOTES
• Part Three: Building Your Portfolio
• 21 Due Diligence Cheat Sheet
• NOTE
• 22 Diligence
• THE CHECKLIST MANIFESTO
• TAILORING DILIGENCE BY STAGE
• CHECKLISTS — USEFUL BUT SELDOM USED
• NOTES
• 23 Management Team Diligence: Assessing the Intangible
• OVERVIEW
• VALUES AND INTEGRITY
• CAN THE COMPANY ATTRACT GIANTS?
• CAN THE CEO EXECUTE? LAMBS VERSUS CHEETAHS
• SERIAL ENTREPRENEURS VERSUS FIRST-TIME ENTREPRENEURS
• BIAS AT WORK: SEEKING ATTRACTIVE MEN
• BACKGROUND CHECKS: FALSE MBAS AND CRIMINAL HISTORIES
• VARIOUS APPROACHES TO MANAGEMENT DILIGENCE
• NOTES
• 24 Market, Product, and Business Model Analysis
• EVALUATING THE PRODUCT
• ASSESSING THE BUSINESS MODEL
• NOTES
• 25 Terms and Conditions Apply
• THE SPIRIT OF THE TERM SHEET
• NEGOTIATION STRESS POINTS
• 26 Structure of the Term Sheet
• OVERVIEW
• CONVERTIBLE LOANS AND SAFE
• KEEPING TERM SHEETS SIMPLE
• SAMPLE SUMMARY TERM SHEET
• NOTES
• 27 Buy Low, Sell High
• VALUATION METHODS AND OTHER VOODOO ARTS
• THE DRIVERS OF VALUATION
• COMPARABLE VALUATIONS OF SIMILAR INVESTMENTS (COMPS)
• DISCOUNTED CASH FLOW METHOD
• LIQUIDATION PREFERENCE
• ANTIDILUTION PROTECTIONS
• GOVERNANCE AND CONTROL: PROTECTING YOUR SECURITIES
• EXIT-RELATED PROVISIONS
• OTHER IMPORTANT TERMS
• SYNDICATING INVESTMENTS
• MILESTONE-BASED FINANCING: RISK MITIGATION OR DISTRACTION
• NOTES
• 28 The Closing Process
• Part Four: The Art of Value Creation
• 29 Serving on Boards
• OVERVIEW
• LEGAL REQUIREMENTS OF BOARD SERVICE
• SELF-EDUCATION: PREPARING FOR YOUR BOARD ROLE
• ROLES AND RESPONSIBILITIES OF A BOARD MEMBER
• NOTES
• 30 Board Culture and Orientation
• TOWARD A BETTER BOARD CULTURE
• ON-BOARDING CHECKLIST
• NOTES
• 31 Let Me Know How I Can Be Helpful: Value Creation
• GOOD GOVERNANCE AS THE FIRST STEP TOWARD VALUE CREATION
• THE CEO’S PERSPECTIVE ON VENTURE CAPITALIST VALUE ADD
• NOTES
• 32 Challenges in the Boardroom
• CEO TRANSITIONS
• BEST PRACTICES IN MANAGING CEO TRANSITIONS
• PERFORMANCE CHALLENGES
• ALIGNMENT ON EXIT
• BOARD EVALUATION
• NOTES
• Part Five: Exits: Liquidity Events and Champagne
• 33 Exit Strategies
• EXIT OPTIONS
• PRECONDITIONS FOR AN EXIT
• NOTES
• 34 Acquisitions
• THE PRIMARY PATH TO AN EXIT
• PUTTING THE COMPANY UP FOR SALE
• DEAL KILLERS
• NOTES
• 35 Initial Public Offering
• THE IPO PROCESS: THE LONG AND WINDING ROAD
• STEPS TO AN IPO
• IPO UNDERPRICING AND DUTCH AUCTIONS
• POST IPO: SHOULD VCs STAY ENGAGED?
• NOTES
• 36 Secondary Sales
• NOTES
• Index
• End User License Agreement