IC309-Private Equity and Venture Capital

Module Provider: ICMA Centre
Number of credits: 20 [10 ECTS credits]
Level:6
Terms in which taught: Spring term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Module version for: 2016/7

Module Convenor: Mr Keith Arundale

Email: k.arundale@icmacentre.ac.uk

Summary module description:

Aims:
The focus of the module is on venture capital and high-growth ventures from the viewpoints of both the entrepreneur or management team and of the investing institution (general partner), although private equity as a whole is covered as well as the relationship between the private equity or venture capital firm and its own investors (limited partner institutions). Extensive use will be made of case studies and a group project in addition to a guest lecture from an invited experienced practitioner or entrepreneur.

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

  • Understand the characteristics of private equity as an alternative asset class and the different strategies for establishing a private equity or venture capital fund.
  • Understand the current issues and challenges facing the private equity and venture capital industry.
  • Be able to prepare a business plan for the purpose of raising finance and to appraise it as an investment executive.
Be aware of the composition of a private placement memorandum for raising a private equity fund and the basic terms and conditions which codify the obligations of, and the relationship between, the general partner and the limited partners.
  • Understand the private equity investment process and how private equity and venture capital firms assess, structure and monitor their deals for both venture capital deals and management buyouts. Be able to negotiate a basic term sheet.
  • Understand how the private equity and venture capital firms monitor and aim to add value to their investments.
  • Be conversant with the principal exit routes and how private equity firms and venture capital 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 or private placement memorandum in their groups.

Outline content:

  • What is private equity and venture capital
  • How private equity and venture capital funds work
  • Business planning process
  • Selecting and approaching private equity and venture capital firms
  • Venture capital and the venture capital investment process
  • Management buyouts
  • The due diligence process
  • Different strategies for investment
  • Living with the private equity or VC investor
  • Exit routes, including IPOs and trade sales.

Brief description of teaching and learning methods:
The core theory and concepts will be presented during 10 X 2 hour lectures (summary content of each shown above), supplemented by 10 x 1 hour seminars (class exercises and discussion of various cases, drawn from the lecturer’s range of contacts with venture capital firms, business angels and entrepreneurs). A guest speaker from the venture capital industry and/or an entrepreneur will be invited to discuss practical issues related to the topics covered on the course. Students will engage, in groups, in the preparation of a business plan or a private placement memorandum.

Contact hours:
  Autumn Spring Summer
Lectures 20
Seminars 10
Guided independent study 170
       
Total hours by term 200.00
       
Total hours for module 200.00

Summative Assessment Methods:
Method Percentage
Written exam 60
Written assignment including essay 40

Other information on summative assessment:
Coursework
Group preparation of either (a) business plan for [real-life or fictitious] technology or other sector focused high-growth company or (b) summary private placement memorandum for a new fund. Choice of assignment may depend on whether students are also taking the optional module in “The Practice of Entrepreneurship”.
Examination

2 hours closed book written examination (answer two questions from a choice of four)

Formative assessment methods:

Penalties for late submission:
The Module Convenor will apply the following penalties for work submitted late, in accordance with the University policy.

  • where the piece of work is submitted up to one calendar week after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for the piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of five working days;
  • where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

  • The University policy statement on penalties for late submission can be found at: http://www.reading.ac.uk/web/FILES/qualitysupport/penaltiesforlatesubmission.pdf
    You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

    Length of examination:
    2 hours.

    Requirements for a pass:
    40%

    Reassessment arrangements:
    By written examination only, as part of the overall examination arrangements for the BSc programme.

    Last updated: 7 April 2016

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