ICM312-Private Equity and Venture Capital

Module Provider: ICMA Centre
Number of credits: 10 [5 ECTS credits]
Terms in which taught: Spring term module
Non-modular pre-requisites:
Modules excluded:
Current from: 2018/9

Module Convenor: Mr Keith Arundale

Email: k.arundale@icmacentre.ac.uk

Type of module:

Summary module description:

The objective of the module is to develop students’ appreciation of the practical aspects of raising private equity or venture capital finance for a management buyout or earlier-stage company, growing the business through the close working relationship between the PE or VC firm and the management team and achieving a successful exit. Both private equity and venture capital deals are covered on this module from the viewpoints of both the entrepreneur or management team and of the investing institution (general partner) as well as the relationship between the PE or VC firm and its own investors (limited partner institutions). Extensive use will be made of case studies and a business plan project in addition to guest lectures from invited experienced practitioners.


To familiarise students with the practicalities of the private equity and venture capital investment process, including the preparation and presentation of a business plan for the purpose of raising finance for a management buyout (MBO) or VC proposition.

Assessable learning outcomes:

By the end of the module it is expected that students will be able to:

  • Understand the real world processes involved ,and issues, in raising private equity and VC finance including finance for early stage, expansion and MBO deals

  • Be aware of other sources of finance, such as business angels, crowdfunding, government sources and bank debt

  • Understand the characteristics of private equity as an alternative asset class and the different strategies for establishing a private equity fund

  • Understand the current issues and challenges facing the private equity and VC industry and how the industry is structured

  • Be able to prepare a business plan for the purpose of raising finance for an MBO or early-stage or expansion proposition

  • Understand the PE and VC investment processes and how private equity firms appraise, structure and monitor their deals

  • Be able to negotiate a term sheet and final shareholders agreement

  • Understand how the private equity or VC firm monitors and aims to add value to the investment

  • Be conversant with the various exit routes and how private equity and VC firms make a return on their investments.

Additional outcomes:

The module offers students the opportunity to work together to develop team-building and presentation skills as they discuss the case studies and prepare and present a business plan

Outline content:

  • Private equity as an asset class

  • Structure and management of private equity and VC firms, including limited liability partnerships and the fund raising process

  • Trends and issues in the global and European private equity and VC marketplaces

  • Other sources of finance, including working capital management, bank debt, mezzanine, government initiatives (including ECFs and VCTs), crowdfunding and business angels

  • Business planning process, incl USPs, SWOT analysis, market and risk analysis, financial scenarios

  • Selecting and approaching private equity and VC firms, including stage and sector focus, and review of current "hot" sectors for investment. Specific issues with regard to corporate venturing and university spin-outs.

  • Venture capital investment process, including financial, commercial and technical due diligence, arriving at the equity stake, terms sheets, negotiations, structuring the deal,

  • Management buyouts, including routes to added value, leveraged deals, types of debt, structuring the buyout

  • Tax and legal issues, including the shareholder’s agreement, warranties and indemnities

  • Monitoring the investment

  • Valuation of investments in early and later stage companies

  • Exit routes, including IPOs and trade sales.

Global context:

The fund raising and investment processes discussed on this module have essentially global applicability.

Brief description of teaching and learning methods:

The core theory and concepts will be presented during lectures. Small class groups will discuss various cases, drawn from the lecturer’s range of contacts with PE and VC firms, business angels and entrepreneurs. Negotiation of term sheets will be discussed in class.

Guest speakers from the private equity and VC industry will be invited to discuss practical issues related to the topics covered on the course.

Contact hours:
  Autumn Spring Summer
Lectures 15
Seminars 5
Guided independent study 80
Total hours by term 100.00
Total hours for module 100.00

Summative Assessment Methods:
Method Percentage
Written exam 50
Written assignment including essay 35
Oral assessment and presentation 15

Summative assessment- Examinations:

One hour closed book written examination.

Summative assessment- Coursework and in-class tests:

Group preparation of business plan for real-life or fictitious technology or other sector focused early-stage company and presentation to judging panel of experts. Participants may also choose to prepare a business plan for a management buyout or management buy-in opportunity (written work: 35%, presentation 15%)

4,000 to 5,000 word business plan coursework project, excl appendices. To be submitted in week of final formal lectures.

Formative assessment methods:

Students will be given written feedback on their coursework business plan prior to the presentations to judging panel.

Penalties for late submission:
Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information: http://www.reading.ac.uk/internal/exams/student/exa-guidePG.aspx

Assessment requirements for a pass:

50% weighted average mark

Reassessment arrangements:

By written examination only, as part of the overall examination arrangements for the MSc programme.

Additional Costs (specified where applicable):

Last updated: 20 April 2018


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