Course Outline

Batch 2014-16

Term VI

Course Venture Capital and Private Equity

Credits 2.5

Course Instructor Sanjay Shanbhag

Objectives
The course is meant for students who plan on being part of an entrepreneurial venture or
partners of venture capital firms or managers of institutional funds that invest in venture capital
or private equity funds. The primary objective of the course is to provide an understanding of
the concepts and institutions involved in entrepreneurial finance and private equity markets. We
will explore private equity from a number of perspectives, beginning with the entrepreneur /
issuer/user, private equity partnerships (GPs) and LPs (investors in private equity partnerships)
The objectives of the course are to build skills, frameworks and knowledge in evaluating venture
capital and private equity investments. While somewhat similar to those employed in traditional
corporate finance, private equity focuses more on identification of opportunities, projected cash
flow, return enhancement, developing value and deal making.
Discussions will cover issues of
An introduction to the different classes of private equity and concerns faced by investors in
private equity partnerships;
Issuers / users of private equity;
The role of the private equity partnership;
Investments in and fundraising by private equity partnerships.

Student Learning Objectives/Outcomes

On successful completion of the course, the participant is expected to have a general
understanding of venture capital and private equity activities and the mechanics and financial
analysis required to value, negotiate and successfully close deals.
Reference Books
Cases will be distributed in class.
Pedagogy
This scope of this course will have a number of different methods of delivery including industry
and background notes, case analysis, interactive discussion of current events and group work

Session Plan

1
2,3
4,5

6,7,8

9
10,11
12,13
14,15
16,17
18,19

20

Topic
Introduction
Issues faced by Investors (LPs) in
Private Equity Partnerships
Issuers in the Private Equity
Market
Evaluating Business Plans
Valuation

Required Preparations
Yale University Investments Office
Technical Data Business Plan

DCF, FCFF, CCF, FCFE, APV, VC/LBO method etc.

Term Sheet

Role of Private Equity Partnerships

- Investing Capital

Fund Raising by Private Equity

Partnerships

Apex Investment Partners (A): April 1995

Apex Investment Partners (B): May 1995
The Exxel Group: September 1995
BW/IP International, Inc.
Publishing Group of America (A)
Publishing Group of America (B)
Accuflow, Inc
Fojtasek Companies and Heritage Partners: March 1995
Fojtasek Companies and Heritage Partners: October 1998
Spectrum Equity Investors, L.P.

Evaluation Scheme

1
2
3
4

Component
Class Participation
Case Write-ups
Mid Term Project (Team)
End Term Exam

Weightages (%)
20%
20%
20%
40%