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 targets students new to VCPE or those interested in VCPE strategic issues; it is not geared for students who have had full-time work experience in the industry.

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.

The course covers three broad categories:

THE INVESTORS AND FUND TERMS	PRIVATE EQUITY	VENTURE CAPITAL
An LP’s goals and constraints Asset allocation underpinnings: mean-variance analysis, Modern Portfolio Theory, the Efficient Frontier, and Monte Carlo simulations The “Yale Model” Key fund terms: fees, expenses, carried interest, hurdle rates, and GP co-investment How fund cash flows work How LPs choose GPs The influence of Cambridge Associates	How and why investors structure deals How PE firms add value How investors screen and choose investments Getting a deal through the Investment Committee Role of debt providers and where incentives overlap and diverge Different PE business models	Which businesses “fit” with VC The VC’s role How to source for and screen investments Managing growth Evaluating a portfolio Pro-rata investing’s pros and cons Creating a new firm and fundraising for a first-time fund Compensation and control within a firm Succession

Course Content

Class Sessions:

Through case discussions and intimate interactions with guests, you will get a true feel for what life is like in VCPE. Guest speakers the past three years:

• 3G Capital (Alex Behring, Daniel Schwartz)
• Accel (Andrei Brasoveanu)
• Aldrich Capital Partners (Mirza Baig, 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 (Michael Chae, Stephen Schwarzman)
• Broadway Angels (Sonja Perkins)
• CalSTRS (Margot Wirth)
• Cambridge Associates (Jody Fink)
• 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, Joseph Bae, Rob Lewin)
• Lone Star (André Collin)
• Luminate Capital Partners (Hollie Haynes)
• NextView (Rob Go)
• 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, John Shumate)
• Yale Investments Office (Amy Chivetta, John Ryan, David Swensen)
• York Capital (Jeremy Blank, Bill Vrattos)

Submissions:
Some cases will require a submission. 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%.

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