The Business of Venture Capital. Mahendra Ramsinghani

13 Fund Size and Portfolio Construction NOTES 14 Performance Analysis INDIVIDUAL PERFORMANCE AND ATTRIBUTION PUBLIC MARKET EQUIVALENTS FUND-LEVEL PERFORMANCE MEASURING REALIZED RETURNS SELF-SELECTION BIAS: GIANTS AMONG MIDGETS NOTES 15 Terms of Fund Investment KEY TERMS FUND FINANCIAL TERMS FUND GOVERNANCE TERMS WHAT INSTITUTIONAL LPs SEEK OFFERING SWEETENERS TO ATTRACT LPs: A DOUBLE-EDGED SWORD MOST NEGOTIATED LP–GP TERMS WHY LPs TERMINATE EXISTING RELATIONSHIPS NOTES 16 The Venture Firm's Ethos, Culture, and Values ETHOS CULTURE AND VALUES GOVERNANCE OF THE FIRM NOTES 17 Raising Your First Fund FIRST STEPS TARGETING LPs MARKET TIMING FIT WITHIN THE LP's CURRENT PORTFOLIO NOTES 18 The Fundraising Roadshow OVERVIEW: THE FUNDRAISING PROCESS GETTING IN THE LP DOOR LOCKING YOUR ANCHOR INVESTOR SELL, SELL, SELL SHOULD YOU WAREHOUSE PORTFOLIO COMPANIES? YOUR BIGGEST FUNDRAISING RISKS, AND HOW TO MANAGE THEM NOTES 19 Why LPs Seek First-Time Funds CREATIVITY, HUNGER, AND PERFORMANCE RANKING EMERGING MANAGERS A FUTURES OPTION NOTES 20 Sourcing Investment Opportunities OVERVIEW: THE SOURCING PROCESS PROACTIVE SOURCING NETWORK-BASED SOURCING ACCELERATORS ANGEL NETWORKS COMMERCIALIZING UNIVERSITY RESEARCH CORPORATE RESEARCH TRADE CONFERENCES INVESTOR PITCH SESSIONS THE AGONY OF MISSED OPPORTUNITIES NOTES

      10  Part Three: Building Your Portfolio 21 Due Diligence Cheat Sheet NOTE 22 Diligence THE CHECKLIST MANIFESTO TAILORING DILIGENCE BY STAGE CHECKLISTS — USEFUL BUT SELDOM USED NOTES 23 Management Team Diligence: Assessing the Intangible OVERVIEW VALUES AND INTEGRITY CAN THE COMPANY ATTRACT GIANTS? CAN THE CEO EXECUTE? LAMBS VERSUS CHEETAHS SERIAL ENTREPRENEURS VERSUS FIRST-TIME ENTREPRENEURS BIAS AT WORK: SEEKING ATTRACTIVE MEN BACKGROUND CHECKS: FALSE MBAS AND CRIMINAL HISTORIES VARIOUS APPROACHES TO MANAGEMENT DILIGENCE NOTES 24 Market, Product, and Business Model Analysis EVALUATING THE PRODUCT ASSESSING THE BUSINESS MODEL NOTES 25 Terms and Conditions Apply THE SPIRIT OF THE TERM SHEET NEGOTIATION STRESS POINTS 26 Structure of the Term Sheet OVERVIEW CONVERTIBLE LOANS AND SAFE KEEPING