In today’s dynamic and ever-evolving business landscape, the ability to secure funding and make strategic investment decisions is essential for both startups and established companies looking to scale and innovate. This course is designed to provide you with a comprehensive understanding of the world of venture capital, equipping you with the knowledge and skills to navigate this complex field. During the training program, participant will delve into the intricacies of venture capital financing, explore the strategies employed by successful investors, and gain valuable insights into the mindsets of entrepreneurs seeking funding.
At the end of the training program, the participant should be able to:
1 What is Venture Capital? A brief history
2 What differentiates Venture Capital from general Private Equity funding?
The different stages of investment- from start-ups to listed equity
Market participants: Investors, Intermediaries, Issuers
3 Case Study: Major Venture Capital companies
1 Brief overview of international and KSA regulatory environments for Venture Capital funds
Key similarities and differences
Universal general concepts
The importance of legal guidance
2 The evolution of Venture Capital funds – an international perspective
The roles of the partners
Typical functional structure of a Fund
The Fund life cycle: Capital raising/ Investing/ Managing/ Exiting
Capital drawdowns and capital multiples
3 The cost of investing
Fee structures: Management fees
The J curve
4 Return of capital
Recycling and Permanent Capital Vehicles
“European” and “American” style distribution waterfalls
Practical Exercise: Calculating the distribution waterfall
5 Co-Investment
What is co-investment?
Co-investment structures – the use of side letters
Case Example: Capital Dynamics approach to co-investment
6 Venture Capital investment strategies
7 Major Fund Terms in Legal Documentation
8 1. Fund Oversight
9 2. The investment team, Investment Committee, Boards, LPACs
1 Venture Capital origination
Finding investments: deal sourcing
Choosing investments: the screening process
Analysis and due diligence
2 Financial analysis:
Use and calculation of internal rate of return (IRR)
IRR vs MOIC
Case Example: Practical application of IRR
Practical Exercise: Understanding the shortcomings of IRR
Case Example: Practical application MOIC
The challenges of modelling for Venture Capital opportunities
Analysing potential product success and market share
Valuation challenges in early-stage ventures
Impact of company life cycle on valuation
3 Commercial analysis:
Verifying the opportunity
Evaluating ability to execute
Legal considerations
Evaluation of risk
General risks
Risks specific to Venture Capital
Case Example: A Venture Capital investment that went wrong
4 Practical Exercise: Identifying areas of risk in a Venture Capital project
1 Understanding Value and Price
2 Differentiating between intrinsic value and price
3 The exit driven perspective to Venture Capital investing
4 The International Private Equity and Venture Capital (IPEV) guidelines
Market and replacement cost approaches to valuation
Income approach to valuation
Understanding and calculating cost of capital
Discounted Cash Flow
Identifying and understanding valuation pitfalls
Incorporating uncertainty
5 Practical Exercise: putting a value on a Venture Capital investment proposal.
1 Understanding the capital pyramid
2 Structuring for optimised returns:
Equity
Debt
Mezzanine
3 Equity kickers
4 PIK loans
5 How do Venture Capital investment structures differ from Private Equity?
6 Using hybrid structures to reduce risk and maximise returns
7 Practical Exercise: Term sheet - a proposed Venture Capital transaction structure
1 The Investment Committee
Process
Preliminary and final investment memorandum
Case Example: Good and bad Investment Committees
2 Documentation
NDA
LOI
Purchase agreement
SPA/SSA
SHA
3 Terms
Conditions precedent
Representations
Pre-emption rights
Drag
Closing
4 Case study: VC vs. PE investment procedures
1 Mechanisms of control
Board
Shareholder
2 Step in rights
3 Case Example: When an investment goes wrong
1 Different types of investment exit and their applicability to Venture Capital investments
2 Trade sale
3 Listing
4 Secondary
5 MBO
6 Leveraged recapitalisation
7 Case study: successful and unsuccessful exits
8 Case Study: Evolution of a market
Some basic knowledge of Venture Capital would be helpful, but not essential.
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Names of the training programs that are integrated (enriched) with the training program:
Names of the training programs that after the training program:
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