资料内容教案讲稿prep session vcic the game

1、VCIC PREP SESSION“VCIC, THE GAME”Prepared by Patrick VernonClinical Associate Professor2015 UNC Kenan-FlaglerAgenda VCIC background Event Itinerary Judging Criteria Tips for Preparing Understanding VC Dos and Donts Covered in the other Prep Session (VC 101) VC Job Cycle Basic VC math The VC ecosyste

2、m (LPs, GPs, etc.) Click to see the most up-to-date bracket.201520152014201420132013201220122011201120102010200920082007200620052004200320022001200019991998Hall of Global ChampionsAgenda A little VCIC background Event Itinerary Judging Criteria Tips for Preparing Understanding VC Dos and DontsRead b

3、usiness plansWatch entrepreneurspitchInterview entrepreneursNegotiate a dealTheVCICExperienceResearch industries, markets, technology, etc.Make investment decisionsWednesday 5pm1On Your Own2Friday 9am3Friday 10am4Friday noon5Friday 1:30pm6Friday 3:45pm7Sell your partners on the dealWednesday-Thursda

4、y Receive business plans by email 5pm Wednesday Research industry, market, etc. Hold team strategy meetings Create lists of questions for entrepreneur Remember rule: no outside contactFriday9:00Entrepreneur pitches9:45Due diligence sessions (15 minutes each)11:30Working lunch: Pick ONE investment1:0

5、0Written deliverables1:30Partner Meetings3:45Negotiations and Q&A4:15Awards Ceremony4:45VC Round Robin (feedback)9:00 Entrepreneur Pitches Take copious notes the presentation is not distributed. You should have already created a list of questions for each entrepreneur. During the presentations,

6、you should pay close attention and add or revise questions in reaction to the pitch.9:45 Due Diligence You will have 15 minutes with each startup. You must perform well in every room each judge only sees you with one startup. Enter and quickly introduce yourself to founder(s), but not to judges. You

7、 must control the meeting. Be assertive, but courteous. Listening is key. Make sure you get answers dont just check off your list of questions.9:45 Due Diligence Practice helps a lot! Sit down with local or student entrepreneurs prior to coming to the event and practice 15-minute due diligence sessi

8、ons. Try to develop your own style a way to efficiently get information from a person while building rapport. Its a tall order. 1:00 Written Deliverables Be aware that judges are time constrained, just as you are. They dont read deliverables until Partner Meeting (next). You are encouraged to use th

9、e provided deliverables template so that judges can focus on your message and not be distracted by design. If you choose your own template, keep it simple, or you run the risk of needlessly confusing judges. You can add up to 3 pages of attachments.again, be very careful to keep it simple. 1:30 Part

10、ner Meeting You have 15 minutes to sell/explain your deal to your partners. Judges will have your written deliverables, but will not have read them beforehand (just like partners). Be prepared for constant interruptions. VCs dont stick to scripts. Make sure the whole team participates in the meeting

11、. 3:45 Negotiations Only the top two teams will negotiate. Youll have 10 minutes, and judges will want to see real negotiation, not just more due diligence. You are not judged on “getting to a deal” but you should be making an effort to determine if agreeable terms are possible. See judging criteria

12、 (next).Agenda A little VCIC background Event Itinerary Judging Criteria Tips for Preparing Understanding VC Dos and Donts Demonstrated deep VC knowledge, terms, exit strategy, return potential, fund fit, etc. Adequately explained deal Handled questions/coaching Confident and convincing All members

13、contributedJudging Criteria Learned what they needed to know? Covered key questions? Dug into key issues? Demonstrated deep understanding of the business opportunity? Lead/controlled the meeting? Established appropriate rapport and demonstrated value as a VC firm?Due Diligence (20 pts)Partner Meetin

14、g (20 pts) Reasons to invest Reasons not to invest Overall decision Valuation, Invest. Size, Syndicate, Fund Fit, Option Pool, etc. Dividends, Board Structure, Liquidation Preference, Anti-dilution, Dates and Other TermsTerm Sheet (20 pts) Focused on the key issues Tackled tough issues Established p

15、ositive rapport Demonstrated firms value Note: teams are not judged on “getting to a deal”NegotiationsTop 6 TeamsNegotiations Only the top two (2) teams will negotiate Entrepreneur will have a copy of your term sheet (not your executive summary) You have 10 minutes You are not judged on “getting to

16、a deal,” but judges want to see negotiating, not more due diligence. Agenda A little VCIC background Event Itinerary Judging Criteria Tips for Preparing Understanding “fund fit” Tips for valuation Dos and DontsUnderstand the VC Profile Strategy: swinging for fences Need to “move the needle” on fund

17、size Expect future rounds You are the experts at venture creation Eye on the exit Not 3X10X on $100k doesnt cut itAnd plan for themMake strategic assertionsBack into your #sFund Profile You will be given a profile explaining the size of your fund and focus For example: $250MM fund with a dedicated s

18、eed fund Formed about 2 years ago 20% already committed 85% active The investment you make must “fit” the profile (not be too large or small)Fund Fit Example$125M FundReally only $105M to invest (fees: 2%/yr x 10 yrs)Could be a few different strategies: 7-10 deals at $9-15M each8-12 deals at $6-12M

19、each 12-16 deals at $4-8M each8-12 deals at $6-12M each Understand that you only have $6-12M to get to exit, which should include future rounds. Always reserve “dry powder” to participate in future rounds. In this scenario: maybe invest $1-3M now, reserve $4-8M for later rounds. If you invest $6M in

20、 this round, you will be judged poorly. Decide: should this deal be a BIG bet for this portfolio? If yes, put more $ to work. If no, limit your exposure.Example Logic of a Deal: Web Services Startup Cash lean startup wants $1.5M and will not need future rounds. You offer $1M now to hit milestone X.

21、You see comps for exits that indicate you should try to reach milestone Y. You coach the founder that youre expecting another round in the $3-5M range for accelerated growth before exit. Example Logic of a Deal: Web Services Startup You find comps that indicate a potential exit at milestone Y in the

22、 $125-150M range. If you put in $6M, youd need $60M for a 10X exit. To get $60M, you need 40% of a $150M exit. You offer $1M investment on $1.5M pre, yielding 40% ownership.and you assume pro rata participation going forward. Bonus QuestionWhat is flawed about the logic of the previous example? Answ

23、erNo syndication. Very unusual for one firm to go all the way alone. Bonus Question #2Can you syndicate this deal?Potential Answers (to the judges) “No: it is too small to be a good fit for our fund if we syndicate. We like the deal enough to take it alone.” “Yes: it is a small bet for this fund, bu

24、t worth doing for the 10X potential.” “Yes, weve found comps that indicate a $500M exit if we can hit Milestone Z, which will require an addition capital infusion around $20M, and exit potential of 20X!”Agenda A little VCIC background Event Itinerary Judging Criteria Tips for Preparing Understanding

25、 “fund fit” Tips for valuation Dos and DontsUse Fund Fit Logic See previous example. We ended up with $1.5M pre-money valuation based on the need to own 40% of a $50M exit to get 10X. To get valuation: Find exit comps Estimate total investment over all rounds Back into the % ownership youd need to g

26、et _X. Advice About Valuation No DCF! Find comparable investments and exits. Back out of exit to current need.(e.g., $200M exit means we need 50% with our $5M investment to get 20X means pre-money $5M) Plan for reasonable % ownership through future rounds (keep everyone incented). Consider syndicati

27、on. Gut check: is a guy in his garage worth $10M? VCs hate it when you over-value a venture.Agenda A little VCIC background Event Itinerary Judging Criteria Tips for Preparing Understanding “fund fit” Tips for valuation Dos and DontsPractice VCIC is a role-playing game: due diligence and negotiation

28、s need to be rehearsed. The more often your team plays the role before the event, the more natural you will perform. The best performers/presenters are the best prepared. Find local startups and local VCs and request 15 minute meetings rather than informational meetings.Practice With Classmates Prac

29、tice with classmates who have startup ideas. Set the clock for 15 minutes and start asking questions. Youll learn techniques for getting to good information quickly while still building rapport. Practice pitching your investment to classmates, professors or advisors who have some VC or VCIC experien

30、ce. Youll learn how to answer tough questions on the fly. Youll get practice doing VC algebra in front of people. Dos Be well-versed in simple VC math and jargon (pre-money, post-money, options, etc.) Understand that VCs need to spend $1M+ on each round and $5M+ on each deal total (amount will depen

31、d on fund profile) Expect follow-on rounds, even if the entrepreneurs dont think theyll need it Nail the due diligence for all the dealsDonts Dont use DCF to calculate valuation. Dont use VC jargon if you arent comfortable with it. Dont hold to your guns in Q&A. If judges are pushing back on som

32、ething you did, consider the possibility that you screwed up. Dont get fancy with the term sheet. VCs tend to see creativity on the term sheet as unnecessary risk. Term Sheet Cheat Sheet for IT 1st round investments usually $1-3M Dont take more than 50% (maybe 40%) in first round Use higher option p

33、ool if new CEO or other major management needed (15-20%) Make sure board seats correspond to % ownership(optional) Organizers, put in typical terms for deals in your areaTerm Sheet Cheat Sheet for ITUse “vanilla” terms (the industry standard*)Dividends: 8%Liquidation preference: 1xAnti-dilution: “ha

34、lf-ratchet”*Industry standards change year to year and region to region. It is important for teams to get coaching from VCs about local conditions. These terms are negotiable, but be careful if you dont fully understand them.(optional) Organizers, put in typical terms for deals in your areaAppendix

35、Extra VC math adviceLingo A round is often described as: “$X investment on $Y pre-money” E.g., “10 on 5” means a $10M investment on a $5M pre-money valuation, resulting in a $15M post-money valuationExample: “2 on 2”Preferred SharesCommon SharesAdding Option Pools Generally 10-20% Higher pool when lots of talent needed, e.g., new CEO % of option pool refers to POST money % Conventionally, pool always comes out of founders sidePreferred SharesCommon SharesExample: “2 on 2”with 10% Option PoolPreferred SharesCommon SharesExample: “2 on 2”