Venture Capital and Buy-outs

Course Overview

This course provides a comprehensive review of the different aspects of venture capital investment and the venture capital industry and the world of management buy-outs.

It examines how venture capitalists decide on which businesses to invest in, the different processes which they may deploy in terms of their participation in the financing of the companies in which they invest, the procedures involved in making the investment and the methods in which they might recover their investment at a later date.

It also provides a detailed study of current developments in private equity investment and the venture capital industry in Europe.

The seminar covers management buy-outs and, after an overview of the history and development of MBOs (including the latest trends in the format of deals), the pricing and structure of the transaction are covered as well as the corporate financial instruments that are used (such as mezzanine finance, high yield instruments and ratchets).

Legal aspects will also be addressed and focus is placed on public to private deals (including the relevance for them of the Takeover Code).

Delegates will be required to bring a laptop with a CD-Rom.

Course Content

Day One

Introduction

• What is venture capital?
• The history of venture capital in the UK and Europe
• Venture capital investment – successes and failures
• A global perspective on venture capital

Investment Theory

• Entry valuation
• The IRR model
• Alternative techniques

Venture Capital Firm Structure

• Closed and open ended funds
• UK venture capital trusts
• VC prospectuses
• Corporate venturing
• Role of bank debt
• Investment strategies
• The relationship between the limited and the general partner

The Selection Process

• How the venture capitalists think
• Winners and losers

Venture Capital Intelligence

• Investees: technology / life science companies
• Management buy-outs
• The business plan
• Venture capital marketplaces

The Investment Process

• Due diligence
• The offer letter
• The investment agreement
• Accountancy and tax issues
• Venture capital participation in management
• Further stage funding
• Monitoring the investment

Venture Capital Exits

• Best practices for VC funded companies
• Exit alternatives: flotation, trade sale, MBO, second round buyout
• Evidence from VC markets worldwide
• How to make a successful exit (including the role of lock-ins and other incentive measures)
• What makes a successful VC investment?

Day Two

Background and Reasons for Development

• History to date
• Different types of transaction and differing structures

Achieving a Successful Buy-out

Pricing an MBO

• Valuation of target company
• Debt considerations
• Use of P/E ratios
• Venture capitalists’ IRR
• Envy factors

Structure of an MBO

• Senior debt
• Mezzanine finance
• Institutional equity
• Vendor notes
• Management equity
• Ratchets

Legal Considerations

• Initiating the MBO
• The acquisition
• The equity investment and loan arrangements
• Financial assistance

Public to Private Deals

Exit Routes

• Trade sales
• Flotations
• Share buy-backs
• Second round buy-outs

Delivering this course in-house for you to a number of participants could be very cost effective. Please call us on 020 7387 4484 to discuss this further.

If you have any questions about this seminar please write to us at post@redcliffetraining.co.uk.