COURSE NUMBER: MBA295B.1

This course is cross-listed with the EWMBA Program

COURSE TITLE: Venture Capital and Private Equity

UNITS OF CREDIT: 3

INSTRUCTORS: Terry Opdendyk & C. Sean Foote

E-MAIL ADDRESS: terry@onset.com , sean@cocreationcapital.com

CLASS WEB PAGE LOCATION: bCourses

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 or venture capital organization. Instructors will determine if a candidate meets the prerequisite criteria.

REQUIRED READINGS:

BASIS FOR FINAL GRADE:

CAREER FIELD: [See ABSTRACT below]

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. However, the course only 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 to 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 decade has seen significant instability and volatility in valuations and funds flows. We will consider whether such fluctuations are 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 essentially is a cottage industry with highly compensated craftsman struggling with many of the structural issues of any industry, including: specialization, generational change, managing growth, new entrants, geographic concentration and globalization. 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 is organized in four modules, each of which represents a key element of the Venture Capital Cycle: 

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 venture 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 venture capital investors and the entrepreneurs they finance. These interactions are at the core of what venture investors do.  

Module 3:  Stages and Styles of Investing: Seed, Corporate Venture,  Micro-Finance , Private Equity
The third module of "Venture Capital and Private Equity" examines several of the many stages and styles of 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 overlaps in processes and structures.

Module 4: Money in and Money out: Fundraising, Liquidity and Limited Partners
Our final module will look in depth at the needs and perspectives of institutional limited partners, and the role of new structures like “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 volatility of the IPO market, both locally and globally, will be explored.

 

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, human resources and several international ventures.

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, Nok Nok Labs and Placecast.

One of Terry’s passions is teaching. He works with students each year focusing on the fundamentals of building successful businesses. He is a Fellow at the Lester Center for Entrepreneurship at the Haas School of Business, University of California where he has taught the Venture Capital and Private Equity class for the past twelve 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, currently as co-founder and Managing Director of his new firm Co=Creation=Capital.

His prior firm, Labrador Ventures, 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 in his fourteenth year teaching venture capital and private equity.  He has taught a course in impact investing at Stanford University, with a real time simulcast to 75 business school campuses around the country.  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 has written and published cases on venture capital and microfinance

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.