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Private Equity (Venture) in 90 seconds

Private Equity (Venture) in 90 seconds. The entrepreneur’s view of VC. Private Equity (Venture) in 90 seconds. The VC’s view of VC. Private Equity (Venture) in 90 seconds. The research institution’s view of VC. Private Equity (Venture) in 90 seconds. The attorney’s view of VC.

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Private Equity (Venture) in 90 seconds

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  1. Private Equity (Venture) in 90 seconds • The entrepreneur’s view of VC

  2. Private Equity (Venture) in 90 seconds • The VC’s view of VC

  3. Private Equity (Venture) in 90 seconds • The research institution’s view of VC

  4. Private Equity (Venture) in 90 seconds • The attorney’s view of VC • VC syndicate will put $20-50+MM at risk for 5-7+ years to get 5-10X return (but 80% of the time they lose their shirts) • VCs demand an academic license broad enough to cover all therapeutic indications but want to pay reagent prices • Growing concern about the strategic value of university-IP, but they still want it • The second most important aspect of a university license is the ability of the newco to do early, high-value retention deals with pharma

  5. What a VC would like to see in an academic license • Apportionment • Assignability • Field (broad) • Founder involvement and retention • Improvements (did you hear pipelining?) • Patent coverage • Pharma-friendly economic terms (generics/biosimilars, royalties)

  6. Differences: Corporate VCcf. Institutional VC • Complementary with existing corporate programs vs. alignment with rest of portfolio • Corporate VC must keep in mind broad interests of shareholders vs interests of LPs • Level of governance • Level of risk-takingvs need for high IRR • Level of risk? Daunting in view of decade-long drought /famine

  7. Why Corporate VC? • Additional avenue of contract consideration • Seat at board table (often observer) • Opportunity for payout downstream • Research/business dichotomy of large pharma • Depends on resources of the large pharma

  8. Dr. Gold (at least 14karat) • A round capitalization ($15MM @ 5MM pre): 15% Gold, 6% UoP, 2% UoA, 2% Angels, <1% crowd-source, ~75% VC • B round ($25MM @ 25MM pre): 7.5% Gold, 3%UoP, 1%UoA, 1% Angels, <<1% crowd, ~78% VC • C round (25MM @ 50MM pre): 5% Gold, • 125MM exit + 125 in earn-outs. Gold clears 6.25MM+

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