Venture Capital, Private Equity, and the Financing of Entrepreneurship

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.

Preface Acknowledgements

About the Authors

1 Introduction

2 The Private Equity Cycle - Fund Raising & Fund Choosing

3 Deal Sourcing and Evaluation - Not as Easy as it Looks

4 Assigning Value

5 Deal Structuring - Private Equity Securities and Their Motivation

6 After the Money Arrives?

7 Getting Liquid: Exits and Distributions

8 The Globalization of Venture Capital and Private Equity

9 Risk and Return

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

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

12 Scaling and Institutionalization

13 Boom and Bust

14 Wrapping Up

Glossary

Index