Venture Capital and the Finance of Innovation

This useful guide walks venture capitalists through the principles of finance and the financial models that underlie venture capital decisions. It presents a new unified treatment of investment decision making and mark–to–market valuation. The discussions of risk–return and cost–of–capital calculations have been updated with the latest information. The most current industry data is included to demonstrate large changes in venture capital investments since 1999. The coverage of the real–options methodology has also been streamlined and includes new connections to venture capital valuation. In addition, venture capitalists will find revised information on the reality–check valuation model to allow for greater flexibility in growth assumptions.

Spis treści:
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.
Append ix D Guide to Crystal Ball.
Glossary.
Index.