Venture Capital Fund Restructuring Vignettes (Abridged)

Paul A. Gompers

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Case | HBS Case Collection | May 2002

Venture Capital Fund Restructuring Vignettes (Abridged)

by Paul A. Gompers

Abstract

This case examines the changes in fund structures proposed by four venture capital firms in 2002: Accel Partners, Battery Ventures, Charles River Ventures, and Kleiner Perkins Caufield & Byers. The venture capital market has experienced a major downturn, and these funds are trying to address investor concerns.

Keywords: Venture Capital; Restructuring; Financial Crisis; Motivation and Incentives; Business and Shareholder Relations; Investment Funds; Financial Services Industry;

Format: Print

24 pages

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Citation:

Gompers, Paul A. "Venture Capital Fund Restructuring Vignettes (Abridged)." Harvard Business School Case 202-126, May 2002.

About the Author

Paul A. Gompers

Eugene Holman Professor of Business Administration

Finance

Entrepreneurial Management

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Technical Note | HBS Case Collection | January 2020

Valuation in Entrepreneurial Settings

Paul Gompers

Citation:
Gompers, Paul. "Valuation in Entrepreneurial Settings." Harvard Business School Technical Note 220-057, January 2020. View Details

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Article | Journal of Financial Economics | January 2020

How Do Venture Capitalists Make Decisions?

Paul A. Gompers, William Gornall, Steven N. Kaplan and Ilya A. Strebulaev

We survey 885 institutional venture capitalists (VCs) at 681 firms to learn how they make decisions across eight areas: deal sourcing, investment selection, valuation, deal structure, post-investment value-added, exits, internal firm organization, and relationships with limited partners. In selecting investments, VCs see the management team as more important than business-related characteristics such as product or technology. They also attribute more of the likelihood of ultimate investment success or failure to the team than to the business. While deal sourcing, deal selection, and post-investment value-added all contribute to value creation, the VCs rate deal selection as the most important of the three. We also explore (and find) differences in practices across industry, stage, geography, and past success. We compare our results to those for CFOs (Graham and Harvey 2001) and private equity investors (Gompers, Kaplan, and Mukharlyamov forthcoming).

Keywords: Venture Capital; Value Creation; Capital Structure; Entrepreneurship; Decision Making;

Citation:
Gompers, Paul A., William Gornall, Steven N. Kaplan, and Ilya A. Strebulaev. "How Do Venture Capitalists Make Decisions?" Journal of Financial Economics 135, no. 1 (January 2020): 169–190. View Details

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Course Overview Note | December 2019

Introduction to Entrepreneurial Finance - 2020

Paul A. Gompers

Citation:
Gompers, Paul A. "Introduction to Entrepreneurial Finance - 2020." Harvard Business School Course Overview Note 220-050, December 2019. View Details

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Venture Capital Fund Restructuring Vignettes (Abridged)

Abstract

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