Author
Andrew Metrick, University of Pennsylvania
Description
In Andrew Metrick’s Venture Capital and the Finance of Innovation, future and current venture capitalists will find a useful guide to the principles of finance and the financial models that underlie venture capital decisions. Assuming no knowledge beyond concepts covered in first-year MBA course, the book will familiarize you with:
*The relationship between risk and return in venture capital
*Historical statistics on the performance of venture capital investments
*Total Valuation - the data and methods used to value a high-growth company
*Partial Valuation – how to analyze the special features of VC transactions such as convertible preferred stock, participating preferred stock, payment-in-kind dividends, and liquidation preferences
*A framework for modeling investment in "research and development"
*The relationship between strategy and finance
*Cutting-edge techniques such as Monte-Carlo analysis, real options, binomial trees, and game theory
Table of Contents
PART I: VC BASICS.
CHAPTER 1: THE VC INDUSTRY.
CHAPTER 2: VC PLAYERS.
CHAPTER 3: VC RETURNS.
CHAPTER 4: THE COST OF VENTURE CAPITAL.
CHAPTER 5: THE BEST VCs.
CHAPTER 6: VC AROUND THE WORLD.
PART II: TOTAL VALUATION.
CHAPTER 7: THE ANALYSIS OF VC INVESTMENTS.
CHAPTER 8: TERM SHEETS.
CHAPTER 9: PREFERRED STOCK.
CHAPTER 10: THE VC METHOD.
CHAPTER 11: DISCOUNTED-CASH-FLOW ANALYSIS OF GROWTH COMPANIES.
CHAPTER 12: COMPARABLES ANALYSIS.
PART III: PARTIAL VALUATION.
CHAPTER 13: OPTION PRICING.
CHAPTER 14: THE VALUATION OF PREFERRED STOCK.
CHAPTER 15: LATER-ROUND INVESTMENTS.
CHAPTER 16: PARTICIPATING CONVERTIBLE PREFERRED STOCK.
CHAPTER 17: IMPLIED VALUATION.
CHAPTER 18: COMPLEX STRUCTURES.
PART IV: THE FINANCE OF INNOVATION.
CHAPTER 19: R&D FINANCE.
CHAPTER 20: MONTE CARLO SIMULATION.
CHAPTER 21: REAL OPTIONS.
CHAPTER 22 BINOMIAL TREES.
CHAPTER 23 GAME THEORY.
CHAPTER 24 R&D VALUATION.
APPENDIX A INFORMATION SOURCES FOR VENTURE CAPITAL.
APPENDIX B SAMPLE TERM SHEET.
APPENDIX C THE VCFI SPREADSHEETS.
APPENDIX D GUIDE TO CRYSTAL BALL.
GLOSSARY.
INDEX.
