文档介绍：Origin of Venture Capital - 1
It did not exist as a profession before WWII
American Research & Development, the first VC firm, 1946, General e Doroit of HBS.
1953, SBA, 1958, SBIC
originally, SBIC could get up to $300,000 government money for each $150,000 PE. Half of the money in subordinated debentures, half in reduced int. loans.
Other benefits… taxes, losses...
History of Venture Capital-2
essful story: SBIC invested in CEIR $900,000, 9months later, became 7 million
by 1961, 250 SBIC gone public
1964, pick of 722 SBIC, 1967 only 250 left.
1968, first time private VC > SIBC
ARD invested in DEC, $70,000 in 1957, got million in 1967.
1974, DOW fell to 600, NASDAQ to
1969, capital gain tax up. VC down.
1965-1980, avg vc return 25%
History of Venture Capital - 3
Sources: 1981, 23% pension, 23% families
1977, 105 private VC, 66 Corp vc, 66 SBIC
typically, expected return 50% for startups, 30-40% for second stage, 25-30% for expansion stage
IPO 1981, 448 co. billion, 1983, 884 co. billion
the supply and demand of VC: the delta factor
seed, early stage, later stage, conventional…
1980s, small firms 322 innovations per million employees, big firms only 225.
Sources of Funds
Angels: 250,000 individuals investing $20-30 billion, > $100,000 each investment
pension funds and ERISA ‘prudent man’
Taxes: 1969, %, 1978, 28%, 1981, 20%
1980, 25% of VC in seed and early stage projects, 1988, reduced to %
Elements of VC investment
Amount and timing of the investment
forms of investment (convertible, preferred…)
terms of investment (conversion price, liquidation preference, dividend rate, etc.)
put and call rights
registration rights
options pools
vesting schedule, employment contracts
board director representation
FVP: background
The existence of intermediaries b/w GP,LP
Angels investing $2-30 billion
Venture Capital Partnerships
why families would like this idea:
tax benefits: 39% e tax, but 28% capital gain tax, 14% if invested into small bu