Venture Capital and Private Equity

Course Number 1428

Senior Lecturer Jo Tango

Fall; Q1Q2; 3.0 credits
28 Sessions

Qualifies for Management Science Track Credit

Overview

Professor Josh Lerner started the Venture Capital and Private Equity (VCPE) course in 1996, and it today is one of the longest-running and largest offerings in the second-year curriculum. The course mostly targets students new to VCPE or those interested in VCPE strategic issues.

Designed as a survey course, the curriculum examines the firm-wide managerial issues that VCPE investors encounter. This course does not help build deal-execution skills; students instead should enroll in Entrepreneurial Finance, Private Equity Finance, or Venture Capital Journey, a new spring course for which VCPE will be a pre-requisite for those without prior industry experience.

The cases are organized into three modules and will cover:

THE INVESTORS

PRIVATE EQUITY

VENTURE CAPITAL

VCPE’s potential positive impact on returns
The “Yale Model”
Asset allocation
Impact of fees and carried interest on returns
How to pick managers
The influence of Cambridge Associates

Ethics
Impact of fund size on returns
Bidding on a deal
Getting a deal through the Investment Committee
PE as part of a multi-asset platform
Debt holders vs. equity holders
Crisis management
Leveraged buy-outs
Mezzanine debt

Incentives that can lead to dysfunction
Compensation
Deal structuring
Owners vs. partners
Starting a new firm
Succession
Term sheets
Lack of diversity
Selection criteria
Impact of hedge funds
Angels vs. seed funds vs. traditional VC
Early-stage vs. growth capital

Course Content

Class Sessions:

Through case discussions and intimate interactions with guests, you will get a true feel on what life is like in VCPE. Guest speakers the past two years and/or those scheduled for the Fall 2022 class are:

3G Capital (Alex Behring, Daniel Schwartz)
Accel (Andrei Brasoveanu)
Aldrich Capital Partners (Raz Zia)
Altos Ventures (Anthony Lee, Ho Nam)
Apax Digital (Marcelo Gigliani, Dan O’Keefe)
Bessemer Venture Partners (Mary D’Onofrio, Elliott Robinson, Janelle Teng)
Blackstone (Stephen Schwarzman)
Broadway Angels (Sonja Perkins)
CalSTRS (Margot Wirth)
Carlyle Group (Tanaka Maswoswe)
Centerbridge (Billy Rahm)
CPPI (Shane Feeney, John Graham, Nate Goulbourne, David Lubek, Deborah Orinda)
CRV (Jon Auerbach)
Founder Collective (David Frankel, Eric Paley, Micah Rosenbloom)
IGNIA Partners (Álvaro Rodriguez)
Individual Foodservice (Ken Sweder)
Innova Capital (Andrzej Bartos and Krzysztof Kulig)
Interline (Mike Grebe)
Johnson Media (Kevin D. Johnson)
KKR (Raj Agrawal, Rob Lewin)
Lone Star (André Collin)
Luminate Capital Partners (Hollie Haynes)
NextView (Rob Go)
NYSTRS (Jody Fink)
Oaktree (Raj Makam)
Owl Capital (Jen Fonstad)
P2 Capital (Josh Paulson)
Pear VC (Keith Bender)
SIN Capital (David Sin)
Stone Arch Capital (Clay Miller)
TA Associates (Jennifer Mulloy)
Tectonic Ventures (Juan Luis Leungli)
True Ventures (Jon Callaghan)
Warburg Pincus (Sean Carney, Bess Weatherman)
Wheelhouse Partners (Ann Berry)
Whiskey Capital (Stephen Campbell)
Yale Investments Office (Amy Chivetta, David Swensen)
York Capital (Jeremy Blank, Bill Vrattos)

Submissions and a small-group discussion:
Some cases will require a submission. There will be a small-group discussion early in the semester for which a short, written reflection will be required. All of these will be graded pass/fail.

Team-based final paper:
Students will work in teams of two. The teams will choose a topic that can cover anything that is VCPE-related. Examples of papers are posted on Canvas. A small group of authors will present their findings to the class. N.B.: the paper will be due before Thanksgiving break.

Grading

Class participation 45%, submissions 10%, final paper 45%.