The Business of Venture Capital -- Contents -- Foreword -- Preface -- Acknowledgments -- PART ONE Raising the Venture Fund -- CHAPTER 1 The Universe of Limited Partners -- An Overview of Alternative Assets -- Sources of Capital -- Comparison of Limited Partnerships -- Summary -- CHAPTER 2 Fund Due Diligence -- Sourcing and First Screens -- Fund Due Diligence: How LPs Evaluate Venture Firms -- Evaluating the Fund Managers -- Emerging Managers: A Promise of the Future -- The Quest for the Elusive Top Quartile Managers -- Fund Investment Strategy -- Market Timing -- Fund Size and Portfolio Construction vis-à-vis Fund Strategy -- Fit within the LP's Current Portfolio -- Why LPs Terminate Existing Relationships -- Summary -- CHAPTER 3 Terms of Investment: The Limited Partnership Agreement -- Sample Terms in a Fund's PPM -- Other LP-GP Terms -- What Matters Most -- Summary -- CHAPTER 4 Fund Structure, Governance, and Operations -- Key Constituents of the GP Team -- Finding Suitable Partners -- Fund Governance and Economics -- Governance of Management Services GP LLC -- Summary -- CHAPTER 5 Getting to the First Close -- Build Your Target List of Investors -- Fund Marketing Materials -- Presentation Slides -- Making the Presentation Pitch: Drink Your Own Kool-Aid -- Attracting the Lead Investor: Your "Nut" -- Communicate, Create, and Maintain Momentum -- Offering Sweeteners to Attract LPs: A Double-Edged Sword -- The Role of Placement Agents in Fund-Raising -- Caveat Emptor -- Summary -- PART TWO The Investment Process -- CHAPTER 6 The Art of Sourcing Investment Opportunities -- The Best Source: The Network -- The Fountainheads of Academia and Research -- Corporate Research -- Venture Events and Trade Conferences -- Venture Farming -- Angels and Pledge Funds -- Business Plan Competitions -- Cold Calling -- You Win Some, You Miss Some -- Summary.

CHAPTER 7 The Art of Conducting Due Diligence -- What Is Important: Jockey, Horse, or Markets? -- Attributes of the Jockey -- Serial Entrepreneurs versus First-Time Entrepreneurs -- What about Charisma? -- Management Team Due Diligence: How to Assess the Jockey -- The Importance of Conducting Background Investigations -- Assessing the Market -- Evaluating the Idea or Product -- Reviewing the Business Model -- Considering the Financial Projections -- Weighing the Importance of Business Plans -- The Due Diligence Checklist -- Summary -- CHAPTER 8 The Basics of Corporations, Ownership, and Control -- Authorized Shares and Issued Shares -- Shareholder Rights -- Role of the Board -- Summary -- CHAPTER 9 Valuation Methods and Other Voodoo Arts -- The Drivers of Valuation -- The Simplified Form of the VC Method of Valuation -- Comparable Valuations of Similar Investments (Comps) -- Discounted Cash Flow Method -- Summary -- CHAPTER 10 Structuring Investment Transactions -- The Spirit of the Term Sheet -- Negotiation Stress Points -- Milestone-Based Financing: Risk Mitigation or Distraction -- Structuring Terms to Generate Target Returns -- Governance and Control: Protecting Your Securities -- Exit-Related Provisions -- Other Terms -- Toward a Simpler Term Sheet for Smaller Investments -- Syndicating Investments -- The Closing Process: After the Term Sheet -- Summary -- CHAPTER 11 Behind Every Successful CEO Stand a Few Good Board VCs -- The Need for Director Education -- Roles and Responsibilities of a Board Member -- Board Composition and Orientation -- Board Practices -- Get That Gavel: Overview of Robert's Rules of Order -- Value Creation: How to Support Your Portfolio Company's CEO -- The CEO's Perspective on Venture Capitalist Value Add -- Setting the Tone through Board Culture -- Improving the Board Game -- Summary -- CHAPTER 12 Exit Strategies.

Preconditions for an Exit -- Acquisitions: The Primary Path to an Exit -- The Sell Process -- When an Acquirer Comes Knocking -- The Buy-Side Acquisition Process -- Deal Killers -- Acquisition Case Study: Mint.com Generates 5x Cash-on-Cash Return in Two Years -- Initial Public Offering -- Private Exchanges: Necessity Drives Liquidity Solutions -- Summary -- CHAPTER 13 Summing Up -- Aptitudes and Attitudes of Successful Practitioners -- Drawbacks -- What about Luck? -- Key Takeaways for Practitioners -- As You Go Forward -- About the Companion Web Site -- Notes -- Suggested Reading -- About the Author -- Index.