9780471230694

Over the past twenty years, the private equity industry has undergone tremendous growth and sweeping changes. With the growth of private equity investing, it is imperative that financial professionals fully understand this complex subject. The cases and notes in this updated edition are designed to provide you with a better understanding of the history of the private equity industrys development and the workings of the industry today. Divided into four modules, the first examines how private equity funds are raised and structured; the second considers the interactions between private equity investors and the entrepreneurs that they finance; the third discusses the process through which private equity investors exit their investments; and the last considers the future of the private equity industry.

Josh Lerner, the Jacob H. Schiff Professor of Investment Banking at the Harvard Business School, is one of the best-known authorities on venture capital. Both his academic and practical activities focus on the structure and workings of these funds. His mix of practical and academic perspectives is at the heart of this book.

Felda Hardymon is a Professor of Management Practice at Harvard Business School and a partner since 1981 at Bessemer Venture Partners, a leading venture capital firm.

Ann Leamon, after co-founding the Center for Case Development at Harvard Business School, now serves as Senior Research Associate dedicated to the Venture Capital & Private Equity class. She came to Harvard after a decade of senior analytical positions in operating companies.

INTRODUCTION

1

(20)

1 Private Equity Today and Tomorrow

1

(9)

2 Martin Smith: January 2002

10

(11)

MODULE 1. THE PRIVATE EQUITY CYCLE: FUNDRAISING

21

(116)

3 Yale University Investments Office: July 2003

25

(27)

4 Acme Investment Trust: January 2001

52

(12)

5 A Note on Private Equity Partnership Agreements

64

(12)

6 Grove Street Advisors

76

(29)

7 A Note on the Private Equity Fundraising Process

105

(6)

8 Gold Hill Venture Lending

111

(26)

MODULE 2. THE PRIVATE EQUITY CYCLE: INVESTING

137

(212)

9 Adams Capital Management: March 2002

143

(18)

10 Martin Smith: May 2002

161

(16)

11 AIT Group PLC

177

(27)

12 A Note on Valuation in Private Equity Settings

204

(20)

13 A Note on European Private Equity

224

(12)

14 Brazos Partners: The CoMark LBO

236

(21)

15 Montagu Private Equity

257

(19)

16 Metapath Software: September 1997

276

(12)

17 A Note on Private Equity Securities

288

(8)

18 Endeca Technologies (A)

296

(23)

19 Chengwei Ventures and the hdt° Investment

319

(17)

20 A Note on Private Equity in Developing Countries

336

(13)

MODULE 3. THE PRIVATE EQUITY CYCLE: EXITING

349

(84)

21 Apax Partners and Xerium S.A.

353

(20)

22 The Exxel Group: March 2001

373

(25)

23 A Note on the Initial Public Offering Process

398

(6)

24 Between a Rock and a Hard Place: Valuation and Distribution in Private Equity

404

(29)

MODULE 4. THE PRIVATE EQUITY CYCLE: NEW FRONTIERS

433

(106)

25 Battery Ventures

440

(23)

26 Accel Partners' European Launch

463

(20)

27 In-Q-Tel

483

(22)

28 A Note on Corporate Venture Capital

505

(5)

29 3i Group PLC

510

(29)

Appendix: A Note on Private Equity Information Sources

539

(17)

Glossary

556

(7)

Index

563

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Venture Capital and Private Equity: A Casebook, 3rd Edition

Venture Capital and Private Equity: A Casebook, 3rd Edition

0471230693

Summary

Author Biography

Table of Contents

Supplemental Materials