Professional Documents
Culture Documents
Team -7
K.S.SRINIVAS -1226108132
GITAM INSTITUTE OF INTERNATIONAL BUSINESS
VISAKHAPATNAM
Investment Stages
Most VC’s have a preference for a particular
investment stage.
Five Stages:
Seed
Start-up
Early
Expansion
Mezzanine/Bridge
Valuation
Stage Criteria Methodology Range
Board involvement
Management recruitment
Future capital raising
Access to business network
Strategy development
Patience
How Do VC’s Make
Money?
Source of VC Income: How do VC’s earn
– Collect management fees
from L.P.’s - 2 1/2% their income?
annually
5%
– Share profits with L.P.’s -
20/80 split on investment 95%
gains
Mgmt. Fee Investment Gains
VC’s focuses
Venture capitalists tend to focus on five specific
areas
Areas of Focus:
Management
Marketplace
Competition
Business Economics
Risks
The Venture Capital Process
Business Plan
First Meeting
Second Meeting
Term Sheet
Due Diligence
Negotiations
Exit Strategies
Sale or Merger
Most likely exit
Initial Public Offering
Small fraction go this way
Redemption
Least attractive
Management buy-out
Generally not possible
Introduction
Common Angels was founded in June 1998 and is headquartered in
Lexington, Massachusetts
investments.
The firm typically invests in series A between $500,000 and $5 million with
The firm prefers to have a seat on the company’s board of directors in its
portfolio companies.
Three Exceptional Rules
• Helped more than 115 companies. Out of which 100 were sold & 34
went for IPO.
• All the members where interested in investing capital for the firms.
Turning Point………..