Working with Private Equity and Venture Capital Portfolio Companies

  • Published on
    11-Aug-2014

  • View
    22.549

  • Download
    0

Embed Size (px)

DESCRIPTION

Career Opportunities with Private Equity and Venture Capital Portfolio Companies Serving as an Expert Network Consultant, Interim Executive, Senior Advisor, Executive in Residence, Entrepreneur in Residence, and/or Deal Executive Speaker: David Teten www.Teten.com / www.ffvc.com

Transcript

<ul><li> How Entrepreneurs and Senior Executives Can Work with Private Equity and Venture Capital Portfolio Companies Serving as an Expert Network Consultant, Interim Executive, Senior Advisor, Board Member, Deal Executive, and/or Executive/Entrepreneur in Residence David Teten Partner, ff Venture Capital Chairman, Harvard Business School Angels of New York ffvc.com teten.com @dteten teten.com/contact David Teten 2012. More at ffvc.com and teten.com http://www.flickr.com/photos/izzard/183927/ </li> <li> Selected past audiences for this presentation Selected private equity and venture capital funds CEO Trust Executive Forum Harvard Business School Alumni Career Management Webinar Series Harvard Business School Club of Connecticut International Executives Resource Group Institute for International Research PE Operations conference David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Agenda Introduction Expert Networks and Interim Executives Senior Advisor Networks Board of Directors Deal Executives/EIRs Next Steps David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Dont Take Notes! Download these slides from: http://www.teten.com/operating-executives/ David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Background David Teten is currently leading the first-ever research study on Best Practices of Venture Capitalists in Increasing Portfolio Company Value through Operational Improvement, with coauthors Koen Bremer, Gyorgy Buslig, and Adham Hussein. In 2010, he published the first-ever research project on Best Practices in Private Equity and Venture Capital Deal Origination, with Chris Farmer, Venture Partner, General Catalyst. These slides provide some of the learnings from these published research studies. David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps ff Venture Capital (ffvc.com) Early-stage technology venture capital fund Founded 1999, with over 150 investments in over 55 companies Focus on early stage web-based services companies with disruptive models, including SaaS, video gaming, digital media, social, mobile and VoIP First investments typically $50-$250K at valuations of $10B YOY $1B YOY $2.5B YOY $10B YOY YO Y Total Director $91K 20% $119K 10% $148K 13% $176K 7% $228K 5% Comp David Teten 2012. More at ffvc.com and teten.com % inc YOY = % increase over 2009-2010 data. Source: 2010 2011 NACD Director Compensation Report </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Four Strategies to Join a Board Communicate your value Use your network Identify/contact search firms Tap your own network (LinkedIn, Coworkers, Alumni Associations) Networking Organizations (YPO, Industry Organizations) Increase your visibility Speak at conferences Publish whitepapers Join expert networks Be imaginative, inventive, opportunistic Invest in the company Join a non-profit board David Teten 2012. More at ffvc.com and teten.com Landing a Board Seat for International Executive Resources Group-Boston. October 26, 2011. New Directions, Inc. </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Additional Resources How to get on a board: http://www.businessweek.com/careers/content/sep2007/ ca20070913_129202.htm . Resources: Your own companys board NASDAQs registry of prospective directors: http://www.nasdaqomx.com/whatwedo/corporatesolutions/ Catalyst for potential female directors: http://www.catalyst.org/ ELC for African-American directors: http://www.elcinfo.com/ Hispanic Association on Corporate Responsibility: http://www.hacr.org/ http://www.advisoryboardarchitects.com/blog/how-get-board-directors-or-high- level-advisory-board http://newdirections.com/ David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Examples of Recruiting Firms with Boardmember Services Korn Ferry: http://www.kornferryinstitute.com/leadership/board_of_directors.php Stybel, Peabody: http://www.stybelpeabody.com/newsite/index.php Allen + Associates: http://www.allensearch.com/ Spencer Stuart: http://www.spencerstuart.com/services/boards/recruitment/ David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Agenda Introduction Expert Networks and Interim Executives Senior Advisor Networks Board of Directors Deal Executives / EIRs Next Steps David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Overview: Deal Executive / EIR Position Full-time role looking for a company to invest in, and typically serve in as CEO Pay Usually modest retainer with carrot of finders fee + CEO role in new company Path forward Demonstrate history of successfully leading company at C-level, or direct report to C-level Offer a deal thesis or letter of intent to PE firm David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps PE funds are primarily looking for deals, not executives. How Private Equity Views Executives Deal Exec with Letter of Intent Thesis-Driven Deal Exec Target-Driven Deal Exec Deal Resource Job Seeker David Teten 2012. More at ffvc.com and teten.com http://www.flickr.com/photos/chailey/138654755/ . Inspired by Notch Partners. </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Certain VC funds proactively seek out qualified Entrepreneurs in Residence Selected Venture Capital Funds with Formal EIR Programs Austin Ventures Dell (the computer company) Foundation Capital ff Venture Capital General Catalyst Redpoint Ventures VTT Technical Research Centre of Finland David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Elements of a Deal Thesis Clear definition of industry niche, size, geography, etc. Transaction rationale consistent with companys growth prospects Basic financial markets analysis: trading range, feasibility Outline of value-creation opportunities Plan for pursuing those sources of value Explanation of why you/ your team are ideally suited to lead effort Roster of 5-20 target companies Status of discussions with targets (if any) Thoughts on likely exit (IPO, strategic buyer) David Teten 2012. More at ffvc.com and teten.com http://www.flickr.com/photos/bfurlong/2351689062/ . Based on Notch Partners and many other sources. </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Elements of a Deal Memo Teaser Business plan Executive profile Forecasts - Strategic - Operational - Financial David Teten 2012. More at ffvc.com and teten.com http://www.flickr.com/photos/11846056@N06/3110329005/ </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Deal Executive Preferred Profile: Credibility CEO-level leader or direct report to C-level - 10+ years in industry/related market. 10+ years leading P&amp;L and preferably also balance sheet experience. - Clear value creation plan. Understanding of private equity. Personal capital to invest Ideally: ready management team; corporate governance skills (board experience), investor relations experience David Teten 2012. More at ffvc.com and teten.com http://www.flickr.com/photos/ilker/2494740320/ </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Deal Executive Preferred Profile: Compatibility Compatible goals Aligned incentives Personal chemistry David Teten 2012. More at ffvc.com and teten.com http://www.flickr.com/photos/superrabbit/319538167/ </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Deal Executive Preferred Profile: Deal-Catcher Proactively seeking to identify deals. - Preferably, has proprietary deal(s) Financially stable to go without salary during search Spousal support 100% committed to a risky process not fully in your control Entrepreneurial and sales oriented Can relocate Prefer: acquisition experience. David Teten 2012. More at ffvc.com and teten.com http://flickr.com/photos/krikit/2745563123/sizes/o/ </li> <li> Intro Expert Advisor Board Deal Exec Next Steps PE/executive intermediaries are investment bank+recruiter hybrids which work with executives throughout the process to help execute a transaction. Leading Investment Banks/Recruiters Specializing in Matching PEGs with Executives Akoya Capital Notch Partners Blackmore Partners R.B. Price &amp; Company Cook Associates Silverfern Group Harvey &amp; Company Skill Capital Ignition Search Partners Tri-Artisan Partners LLC (VC-focused) David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps PE fund/executive intermediaries have a standard process to execute a transaction. Review industry for feasibility: - Market trends (opportunistic research analysis) - Valuation analysis - Capital-intensity requirements - Fragmentation analysis Profile executive to assess candidacy Source companies Source sponsors David Teten 2012. More at ffvc.com and teten.com http://www.flickr.com/photos/pfala/3036252334/ </li> <li> Intro Expert Advisor Board Deal Exec Next Steps An executive has two main paths to choose from in pursuing a transaction: Find the company and get close to signing a Letter of Intent, then pursue sponsor Find sponsor and then search for company. - Executive screens for funds with track record of pursuing executive-led transactions and interest in industry - More important to use this strategy with larger deals David Teten 2012. More at ffvc.com and teten.com http://www.flickr.com/photos/thalamus/3560789785/ </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Many companies prefer to sell to management, even at risk of a lower price than they might get from an auction. Primary Reasons Some Companies Prefer Selling to Management Secrecy Continuity Speed Lower investment banking fees Dummy insurance: easier to keep a stake in the spunoff company Trust/proven competency Relationship with the Board of Directors Rick Rickertson, Buyout: The Insiders Guide to Buying Your Own Company, 49-50. David Teten 2012. More at ffvc.com and teten.com </li> <li> Intro Expert Advisor Board Deal Exec Next Steps Step 1 of 5: Launch Relationship with Fund Introduction Initial meetings Assessment of investment thesis Duration: 2-4 weeks David Teten 2012. More at ffvc....</li></ul>

Recommended

View more >