Real Venture Capital: Building International Businesses PDF
Preview Real Venture Capital: Building International Businesses
Real Venture Capital This page intentionally left blank Real Venture Capital Building International Businesses Richard Thompson © Richard Thompson 2006, 2007, 2008 Softcover reprint of the hardcover 3rd edition 2008 978-0-230-20222-1 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First edition 2006 Revised edition 2007 This edition 2008 Published by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N. Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 978-1-349-30035-8 ISBN 978-0-230-59406-7 (eBook) DOI 10.1057/9780230594067 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. 10 9 8 7 6 5 4 3 2 1 17 16 15 14 13 12 11 10 09 08 ‘Esto perpetua’ Paolo Sarpi 1623 This page intentionally left blank Contents About the Author ix Preface xi 1. Introduction and Rationale 1 2. Background and History of Venture Capital 5 3. Other Forms of Private Equity 9 4. Venture Capital Definitions and Approaches 12 5. Growth Markets and International Expansion 18 6. The Commercial Application of Technology Products 23 7. Entrepreneurs, Managers and Directors 26 8. The Management of Resources 31 9. Financial Philosophy and Control 34 10. Financing and Its Structures 38 11. Start-Ups 41 12. Second-Stage Financings 45 13. Third-Stage Financings 48 14. Turnrounds 51 15. Strategic and Other Alliances 54 16. Flotations 57 17. Acquisitions and Mergers 61 18. Trade Sales 64 19. Case Studies 67 20. International Niche Businesses 74 21. International Development 79 vii REAL VENTURE CAPITAL 22. International Financing 84 23. Fund Structures and Management 87 24. Investment Processes 90 25. Investment Examples 96 26. Future Developments 100 27. The Role of the Venture Capitalist 104 28. The Role of the Investor 107 29. The Impact on the Economy 111 30. Conclusions and Lessons 114 Appendix I – An Early Paper on Venture Capital 118 Appendix II – The Healthcare and Technology Markets 133 Appendix III – Company Boards: Their Role and Structure 146 Appendix IV – Investment Memorandum Formats 170 Appendix V – Examples of Investment Memoranda 177 Glossary of Terms 219 Index 222 viii About the Author RICHARDTHOMPSONspecialised in maths, higher maths and physics at Downside School and, after a NationalService Commission in the Royal Engineers, graduated in engineering from Cambridge University. He then qualified pro- fessionally in both chartered engineering and management consultancy. He became a Director of the P-E Consulting Group in charge of its corporate strategy practice, before spending two years running New Court & Partners within the Rothschild Group. In 1977, he co-founded Thompson Clive & Partners with Colin Clive, and has been Executive Chairman of that inter- national venture capital group since then. In 1988, through a buy-out with GT Management, he estab- lished Pantheon Holdings with Rhoddy Swire, and was Chairman of that international fund of funds management group, specialising in private equity, for the first eight years of its existence. In 2005, he set up Solon Ventures with Angus Whiteley, and with support from Stewart Newton and Charles Richardson, and is Chairman of that company which has been formed to provide venture capital funds and assistance to UK healthcare and technology companies with international growth prospects. Over the years, he has been chairman or director of a number of UK and US companies, some of which were floated on the London or NASDAQ Stock Exchanges. He has a wide experience of international business built up over a thirty-five year period. He is married, has two married daughters and lives in London and Hampshire. ix
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