COURSE NUMBER: EWMBA295B.1

 

This course is cross-listed with the FTMBA Program

 

COURSE TITLE: Venture Capital and Private Equity

 

UNITS OF CREDIT: 3.0

 

INSTRUCTORS: Terry Opdendyk & C. Sean Foote

 

E-MAIL ADDRESS: terry@onset.com , foote@haas.berkeley.edu,

 

CLASS WEB PAGE LOCATION: https://bspace.berkeley.edu/portal

 

MEETING DAY(S)/TIME: Wednesdays, 6:00PM – 9:30PM

 

PREREQUISITE(S): It is strongly recommended that EWMBA295A Entrepreneurship be completed prior to taking this course. If you haven't taken EWMBA295A, your background should include business plan development and opportunity assessment in an early-stage growth company.

 

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES:
Venture capital is core to our Silicon Valley high technology economy. U.C. Berkeley is located in the ‘Mother Lode’ of this very special and unique investment category.  This course is an advanced offering for those who intend to seek, or manage, venture capital funding. Accordingly it is appropriate for students who aspire to become CEO’s of entrepreneurial ventures, partners of venture capital firms or managers of institutional funds that invest in venture capital. The course will also benefit those who will work in major corporations in roles that intersect with the venture capital community, such as M&A, Business Development and CFO. More generally, venture capital, is a sub-category of private equity, and shares many common characteristics. Students interested in categories of private equity other than venture capital may find this course of interest for that reason; however the course clearly focuses on venture capital.

The course will make extensive use of case studies and guest lecturers.  Industry experts, entrepreneurs, venture capitalists and those who advise them, such as investment bankers and lawyers will be frequent guests. We take extensive advantage of the school’s geographic proximity to Silicon Valley to enrich the course with exposure industry leaders and emerging innovators.

 

Over the past thirty-five years, there has been a tremendous boom in venture capital, accompanied by significant volatility and erratic economic returns. The industry has gone through periods of boom and bust, but is broadly recognized as one of the essential pillars of a vibrant entrepreneurial economy. The practices of US venture capital are being emulated around the world.  Yet the last several years has seen significant instability and volatility in valuations and funds flows. Are such fluctuations unique, or rather typical of these illiquid and imperfect high risk markets?

Recent experience indicates that the venture capital industry is in the process of rapid evolution. Some challenge whether the investment results justify the risk, while others, especially overseas, are aggressively working to build local venture capital capabilities. Venture capital is essentially a cottage industry with highly compensated craftsman struggling with many of the structural issues of any maturing industry, including: specialization, generational change, managing growth, geographic concentration and globalization, among others. So while challenges remain, the industry seems destined to play an import continuing role locally and globally. We will consider all these strategic issues as well as the basic tools of the trade.

 

CLASS FORMAT: The course will be organized in four modules: 

Module 1:  Industry Overview, Fund Structure and Individual Career
The first module of "Venture Capital and Private Equity" examines how private equity firms are organized and structured. The structure of private equity funds, while often arcane and complex, has a profound effect on the behavior of venture and buyout investors. Consequently, it is as important for the entrepreneur raising private equity to understand these issues as it is for a partner in a fund.

 

Module 2: Investing Toolkit: Investment Selection, Valuation and Terms
The second module of the course will prepare you for what many perceive as the core of the venture capital business: identifying opportunities and making investments. We will consider the elements of what makes a good opportunity, as well as what makes an opportunity a good investment for a specific fund. We will master the key tools of assessment, valuation, structuring and terms. We will investigate the interactions between private equity investors and the entrepreneurs that they finance. These interactions are at the core of what private equity investors do.  



Module 3:  Stages and Styles of Investing: Seed, Corporate Venture, Impact Investing
The third module of "Venture Capital and Private Equity" examines several of the many stages and styles of venture investing, and their inter-relationship, from the initial seed investment, through the financing of growth, and the involvement of corporate partners. Corporate venturing presents special challenges to the corporation, its venture co-investors and the entrepreneur. A special segment will investigate the world of impact investing and probe for surprising overlaps in processes and structures.

 

Module 4: Money in and Money out: Fundraising, Liquidity and Limited Partners

Our final module will investigate how one forms and fund raises for a venture or private equity fund. We will look in depth at the needs and perspectives of institutional limited partners and emerging trends such as the role of new structures e.g. “funds-of-funds”.  We will also investigate the various avenues by which venture investors achieve liquidity so they can provide returns to their investors. The recent re-emergence of the IPO market both locally and globally will be explored.

 

REQUIRED READINGS:

-           Venture Capital & Private Equity: A Casebook; Fourth edition, Lerner and Hardymon, Harvard Business School, John Wiley& Sons, Inc.

-          Term Sheets & Valuations, Alex Wilmerding, Aspatore/Thomson 2006

-          The text will be supplemented by other cases and readings, which will be posted to the courses web site on study.net.

 

BASIS FOR FINAL GRADE:

 

INSTRUCTOR BIOS:

 

Terry Opdendyk

 

Terry Opdendyk has specialized in working with technology based start-ups for more than 40 years. He founded ONSET Ventures, a premier Silicon Valley venture capital firm, in 1984. He is Managing Director and General Partner at ONSET.

 

Prior to launching the firm, Terry was president of VisiCorp, guiding the software publishing company from inception into an industry leader. Early in his career, Terry worked as a technical manager for Hewlett-Packard as a part of the original group of individuals that started HP’s computer business. He later headed Intel Corporation's microcomputer systems business, microprocessor architecture activities, several international ventures and human resources.

 

At ONSET Ventures, Terry maintains a broad spectrum of investment interests including software, computing and communications infrastructure and the leverage of big data. He serves on the boards of both public and private companies, such as Adaptive Planning, Cloud Cruiser, NetSeer, Sentilla, andPlacecast.

 

One of Terry’s passions is teaching. He works with students each year focusing on the fundamentals of building successful businesses. He currently is a Fellow at the Lester Center for Entrepreneurship and Innovation at the Haas School of Business, University of California where he has taught the Venture Capital and Private Equity class for the past ten years.

 

Terry received a B.S. from the Michigan State University Honors College and a M.S. from Stanford University.

 

 

Sean Foote

Sean Foote has been a venture capitalist investing in early stage companies for the past 15 years. His firm. Labrador Ventures, has invested in more than 100 companies, including Hotmail, Pandora, and RocketFuel.  He has co-founded several entrepreneurial companies, and spends his non-profit time in the fields of impact investing and education. 

Before venture investing, Mr. Foote was a management consultant with Boston Consulting Group, working in a wide range of industries such as telecom, computers, healthcare, banking, and automotive on topics ranging from strategic alliances to Internet strategies. Mr. Foote also worked as a systems engineer for AT&T Bell Laboratories, developing artificial intelligence systems for testing the most complicated telecommunications networks.

Mr. Foote is a lecturer at the University of California's Haas School of Business where he teaches the top ranked venture capital and private equity classes as well as Microfinance. He has also taught classes on entrepreneurship at the University of Michigan's Business School, University of Virginia's Darden School of Business and University of Pennsylvania's Wharton School of Business   He teaches a course in impact investing at Stanford University, with a real time simulcast to 75 business school campuses around the country.

Mr. Foote received his undergraduate degree in Electrical Engineering from the University of Missouri Rolla (1988), and his MBA from the University of Virginia's Darden Graduate School of Business (1993), where he received the Shermett Award granted to the top 3% of students.