- Cover
- Title Page
- Preface
- Introduction
- PART I: Understanding the Major Players
- CHAPTER 1: The Venture Capitalist: Funder of Dreams
- CHAPTER 2: The Entrepreneur: His Mind and His “Cultivation”
- DNA of the Entrepreneur
- Driven by Passion
- Motivated by the Opportunity to Make a Positive Difference
- The Need to Recognize Reality: Beware the Seduction of Money and Power
- The Importance of Fortunate Timing
- Experience and Maturity Can Be Important, Too
- Resolute, Energetic Drive Is the Most Common Denominator
- They're Not Just Resolute; They Are Bold and Daring, Too
- Environments That Cultivate Entrepreneurs
- The Emergence of an Entrepreneurial Ecosystem in Chicago
- The Age‐Old Question: Nature or Nurture?
- PART II: For the Investor: A Guide to Realizing Big Returns
- CHAPTER 3: Why Should You Invest in Venture Capital?
- It Makes Sense Even for Conservative Investors
- A Hedge Against Inflation and Lengthy Bear Markets
- Hedge Funds and Private Equity Buyout Funds No Longer So Attractive
- Venture Capital's Strong Historical Returns
- Don't Invest More Than You Can Afford to Lose
- Substantial Institutions Love Venture Capital
- Emotional Reasons for Venture Capital Investment
- CHAPTER 4: How to Find the Right Venture Capital Firm
- Surveying the Landscape of Venture Capital Firms
- Firm Selection by Venture Stage Focus
- Why Should You Care About a Firm's Venture Stage Focus?
- Firm Selection by Industry Focus
- Firm Selection Based on Geographic Focus
- The New Online Equity Crowdfunders
- Other Resources for Selecting a Venture Capital Firm
- Vetting Venture Capital Firm Candidates
- CHAPTER 5: Venture Capital Investment versus “Buffett's Real Rules” of Investment
- CHAPTER 6: Avoid the Seduction of Unicorns: Get in Early
- It's All High Risk, So Get in Early When the Biggest Returns Are Possible
- Excessive Unicorn Valuations: All the Risk without the Big Reward Potential
- Business Valuation 101
- Applying Business Valuation 101 to Venture Capital Investment
- Try Applying That Logic to Unicorns
- Why Many Unicorn Valuations Don't Make Sense to Us
- Unicorns Having Difficulty Exiting and Delivering Investor Returns
- Now You Know Why We Believe in Early‐Stage Investment
- Our Concerns for the Venture Capital Industry and Individual Investors
- CHAPTER 7: Finding the Highest Quality Investments at the Right Price
- CHAPTER 3: Why Should You Invest in Venture Capital?
- PART III: For the Entrepreneur: A Guide to the Money Search and All That Follows
- CHAPTER 8: The Mating Dance: Prospecting for a Venture Capital Investor
- Actually, Lots of Sources and Lots of Available Dollars
- How to Appeal to the Venture Capitalist
- Prospecting for Gold, or, Better Yet, Drilling for Oil
- Venture Capitalists' View of Deal Stages
- Targeting Your Money Search Based on VC Industry Focus
- How to Do All This VC Screening
- An Alternative: Introduction through Expert Middlemen
- Making Contact with the VC
- Other Ways of Making Contact
- Evolution of the Venture Capital Community: Angel Groups and Online VC Portals
- More on Online Venture Capital Investment Platforms
- CHAPTER 9: The Final Exam: Due Diligence
- Is Due Diligence Really That Important?
- A Warning to Entrepreneurs: Beware of Limited Due Diligence
- Return on Due Diligence Investment Tough to Quantify
- Make No Mistake: Due Diligence Is Important
- What Due Diligence Is All About
- The Due Diligence Process
- The Focus of Due Diligence Questioning
- Importance of Treating the VC with Respect and Sincerity
- Time Can Be of the Essence
- Some Advice for Less Experienced VCs
- Some Advice for Less Experienced Investors
- CHAPTER 10: Finding Your Deal‐Doing Lawyer
- So Many Types of Lawyers to Consider
- Why You Need a Deal‐Doing Lawyer
- Knowledge of the Venture Capital Process
- Some Realities to Consider
- Finding the Right Legal Counsel
- Speed Can Be Important
- Lots of Legal Consistency
- Build Trust, Not Litigation
- The Typical Process
- Differing Degrees of Legal Orientation
- CHAPTER 11: Financing Has Arrived and “You're Married”…Now What?
- Now You Answer to a Higher Authority—a Board of Directors
- Be Ready to Make Management Changes
- Anticipate Complications and Management Challenges
- The Critical Search for Talent as the Venture Evolves
- Executive Search Consultants: Expensive, But Can Be Worth It
- The Board's Role as Guardians of the Venture and the Investors' Money
- Board Meetings
- Bankers and Suppliers: Sources of Lower Cost Funds
- Following the Money
- When Crisis Management Is Required
- CHAPTER 12: The Last Dance: A Successful Exit
- What Constitutes a Successful Exit?
- A Range of Exit Options
- IPO as a Badge of Honor
- Remaining Private May Better Meet the Entrepreneur's Needs
- Going Public Can Also Mean Vulnerability to Rumors and Ruin
- Other Risks of Going Public
- Beware of Investment Bankers' Inherent Drive to Go Public
- Investment Bankers and Venture Capitalists Are Not the Same
- The Groupon Story: A Post‐IPO Nightmare
- Lessons Reinforced by Groupon's Story
- Timely Liquidation Less Risky than Betting on Volatile Public Markets
- There Are Exceptions: The Nanophase Technologies Story
- Sale to or Merger with a Complementary Business
- Benefits of Being Acquired: The Cleversafe Story
- Issues to Consider Before Selling the Baby
- Truly “All's Well that Ends Well”
- CHAPTER 13: Interview with a Successful Entrepreneur
- CHAPTER 8: The Mating Dance: Prospecting for a Venture Capital Investor
- PART IV: Looking Ahead: What’s to Come
- CHAPTER 14: The Foreseeable Future
- The Case for Even Greater Innovation and Venture Capital Opportunity
- Technology Advancement—and Investment—Opportunities
- Artificial Intelligence: Computers Becoming Even More Integral to Our Lives
- Will the Computer Be Wise?
- Big Data and Predictive Analytics: The Why of Everything
- Biology as a Computer
- Nanotechnology: The Domain of the Very Small
- Robotics: Machines Come to Life
- Virtual Reality: The Unreal Simulating the Real
- The Internet and the Coming “Third Wave”
- Biomedical Advances through Information Flow
- CHAPTER 14: The Foreseeable Future
- Acknowledgments
- About the Authors
- Index
- End User License Agreement
Building Wealth through Venture Capital
A PRACTICAL GUIDE FOR INVESTORS AND THE ENTREPRENEURS THEY FUND
Leonard A. Batterson
Kenneth M. Freeman
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