风险投资风险投资Venture CapitalZhejiang University 5 May 2008Alexander Weiss2Venture Capital Alexander Weiss Zhejiang University - 5 May 2008AGENDA 1. Introduction 2. Venture Capital Market Private Equity vs. Venture Capital Industry structure and dynamics Funds structures 3. What VCs really do Setting the scene Investment Process The “Perfect VC” 4. Lessons learned 5. Q Adept Telecom (Observer); MCN telecom (Alternate Director); Q1 Carrier (Alternate Director)19982001:GermanyWeiss Trading Company GmbH Position:Owner Manager Specializing in real estate foreclosure sales (30+ transactions)19961997:JapanNippon ABS / Bosch Braking Systems JapanEducation Since 2006:ChinaZhejiang University (since 4-2007) Adjunct Professor VC-Seminar for MBA students1998-2001:USA, France, JapanThunderbird School of Global Management MBA in International Management19901997:Germany, USAUniversity of Stuttgart Master of Science in technically oriented Business Administration, Minor in Chemical Engineering 4Venture Capital Alexander Weiss Zhejiang University - 5 May 2008AGENDA 1. Introduction 2. Venture Capital Market Private Equity vs. Venture Capital Industry structure and dynamics Funds structures 3. What VCs really do Setting the scene Investment Process The “Perfect VC” 4. Lessons learned 5. Q&A Reading recommendations Contact details5Venture Capital Alexander Weiss Zhejiang University - 5 May 2008What is Private Equity?Alternative InvestmentsPrivate Equity Buyout CapitalMezzanine CapitalGrowth Capital Venture CapitalHedge Funds Long/Short Global Macro Event Driven Market Neutral Arbitrage Emerging MarketsReal Estate Raw land Apartments Office buildings Warehouses Shopping centers Hotels REITsPhysical CommoditiesCurrenciesInterest RatesNatural Resources Private Equity (PE) is a major component of the alternative investment universe In the broad sense, PE provides capital to enterprises not quoted on a stock market in exchange for equity Venture Capital (VC) is a sub-class of Private EquityAttention: in Europe and Asia often used synonymouslyBondsStocks6Venture Capital Alexander Weiss Zhejiang University - 5 May 2008Private EquityVenture CapitalEarly StageResearch and DevelopmentStart-up: Production, Sales, Marketing ExpansionWorking Capital for ExpansionGrowth (new markets)IPO/Trade sale preparationLater StageLBO, MBO, MBI IBO, BIMBORestructuring, TurnaroundTypical Investment Amount (M)0,5-21-5 5-2510-10020-30000The Private Equity Spectrum 1Second RoundThird RoundPre- IPOBuyoutsStart upFirst RoundSeed7Venture Capital Alexander Weiss Zhejiang University - 5 May 2008The Private Equity Spectrum 2AngelGrowth CapitalMezzanineVulture/ RestructuringEarly Stage“Venture Capital”“Private Equity”AngelGrowth CapitalMezzanine capitalVulture/ RestructuringSmall and Midcap BuyoutEarly StageLater StageLarge BuyoutP2PPrivate Equity (generic term)Seed StageStart-up StageIncubatorBridge Capital Development capitalGeneral characteristics:- seek risk, expect high returns- temporary involvement but long term view- opportunities to add value- look for serial managers/entrepreneurs- equity ownership8Venture Capital Alexander Weiss Zhejiang University - 5 May 2008Private Equity and Venture Capital Main differencesSignificant portion or majorityMinority stakeOwnershipBacking experienced managersBacking entrepreneursSuccess factorstreamlining operations through restructuring, divestitures, or refinancingfunding, networking, and advice to the companiesValue-AddHigh percentage of success with limited number of write-offsA few winners with many write-offsBusiness ModelEstablished industry focusCutting edge technology focusSectorStable and mature growthSeed, Start-up, ExpansionStagePrivate Equity (buyouts)Venture CapitalComparisonVery different game!Different cyclesDifferent skill sets requiredDifferent risksTrue Venture Capital seeks a return on cleverness. Private Equity seeks a return on efficiency9Venture Capital Alexander Weiss Zhejiang University - 5 May 2008AGENDA 1. Introduction 2. Venture Capital Market Private Equity vs. Venture Capital Industry structure and dynamics Funds structures 3. What VCs really do Setting the scene Investment Process The “Perfect VC” 4. Lessons learned 5. Q&A Reading recommendations Contact details10Venture Capital Alexander Weiss Zhejiang University - 5 May 2008Industry structureInvestorsPensions funds Banks Insurance Comp. Family offices Wealthy Individuals Corporations Governments Endowments Foundations .IntermediariesLP-Funds Independent Semi-captive CaptiveOther Listed investement Corporate VC own balance sheet (banks, insurances) .CapitalStake/ InterestCompaniesSmall companies: Seed, Start-up Venture CapitalMedium-sized companies: Expansion Capital structure changes Shareholder changesQuoted companies: Public to private (P2P) Special situationsStakeCapital Monitoring SupportConsultants11Venture Capital Alexander We