HBS Course Catalog

Venture Capital and Private Equity

Course Number 1428

Senior Lecturer  Jo Tango
Senior Lecturer  Archie L. Jones
Fall; Q1Q2; 3.0 credits
28 Sessions

Overview

Note: this course is not for students with prior full-time VCPE experience; it is for students new to VCPE.

Professor Josh Lerner started the Venture Capital and Private Equity (VCPE) course in 1996, and it today is one of the longest-running and largest offerings in the second-year curriculum.

Designed as a survey course, the curriculum examines the firm-wide managerial issues that VCPE investors encounter. This course does not help build deal-execution skills; students instead should enroll in Entrepreneurial Finance, Private Equity Finance, or Venture Capital Journey.

The course covers three broad categories:

THE INVESTORS AND
FUND TERMS

PRIVATE EQUITY

VENTURE CAPITAL
  • An LP’s goals and constraints
  • Asset allocation underpinnings: mean-variance analysis, Modern Portfolio Theory, the Efficient Frontier, and Monte Carlo simulations
  • The “Yale Model”
  • Key fund terms: fees, expenses, carried interest, hurdle rates, and GP co-investment
  • How fund cash flows work
  • How LPs choose GPs
  • The influence of Cambridge Associates
  • How and why investors structure deals
  • How PE firms add value
  • How investors screen and choose investments
  • Getting a deal through the Investment Committee
  • Role of debt providers and where incentives overlap and diverge
  • Different PE business models
  • Which businesses “fit” with VC
  • The VC’s role
  • How to source for and screen investments
  • Managing growth
  • Evaluating a portfolio
  • Pro-rata investing’s pros and cons
  • Creating a new firm and fundraising for a first-time fund
  • Compensation and control within a firm
  • Succession

Course Content

Class Sessions:

Through case discussions and intimate interactions with guests, you will get a true feel for what life is like in VCPE. Guest speakers the past three years:

  • 3G Capital (Alex Behring, Daniel Schwartz, Justin Fox, and Mike Spinello)
  • Accel (Andrei Brasoveanu)
  • Aldrich Capital Partners (Mirza Baig, Raz Zia)
  • Altos Ventures (Anthony Lee, Ho Nam)
  • Apax Digital (Marcelo Gigliani, Dan O’Keefe)
  • Bessemer Venture Partners (Mary D’Onofrio, Elliott Robinson, Janelle Teng)
  • Blackstone (Michael Chae, Stephen Schwarzman)
  • Broadway Angels (Sonja Perkins)
  • CalSTRS (Margot Wirth)
  • Cambridge Associates (Jody Fink)
  • Carlyle Group (Tanaka Maswoswe)
  • Centerbridge (Billy Rahm)
  • CPPI (Shane Feeney, John Graham, Nate Goulbourne, David Lubek, Deborah Orinda)
  • CRV (Jon Auerbach)
  • Founder Collective (David Frankel, Eric Paley, Micah Rosenbloom)
  • Grain Management (David Grain)
  • IGNIA Partners (Álvaro Rodriguez)
  • Individual Foodservice (Ken Sweder)
  • Innova Capital (Andrzej Bartos and Krzysztof Kulig)
  • Interline (Mike Grebe)
  • Johnson Media (Kevin D. Johnson)
  • KKR (Raj Agrawal, Joseph Bae, Rob Lewin)
  • Lone Star (André Collin)
  • Luminate Capital Partners (Hollie Haynes)
  • NextView (Rob Go)
  • Oaktree (Raj Makam)
  • Owl Capital (Jen Fonstad)
  • P2 Capital (Josh Paulson)
  • Pear VC (Keith Bender, Mar Hershenson)
  • SIN Capital (David Sin)
  • Stone Arch Capital (Clay Miller)
  • Summit Partners (Bruce Evans, Tom Jennings)
  • TA Associates (Jennifer Mulloy)
  • Tectonic Ventures (Juan Luis Leungli)
  • True Ventures (Jon Callaghan)
  • Warburg Pincus (Sean Carney, Bess Weatherman)
  • Wheelhouse Partners (Ann Berry)
  • Whiskey Capital (Stephen Campbell, John Shumate)
  • Yale Investments Office (Amy Chivetta, John Ryan, David Swensen)
  • York Capital (Jeremy Blank, Bill Vrattos)

Submissions:
Some cases will require a submission. These will be graded pass/fail.

Team-based final paper:
Students will work in teams of two. The teams will choose a topic that can cover anything that is VCPE-related. Examples of papers are posted on Canvas. A small group of authors will present their findings to the class. N.B.: the paper will be due before Thanksgiving break.





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