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:
Current from: 2022/3

Module Convenor: Dr Keith Arundale
Email: k.arundale@icmacentre.ac.uk

Type of module:

Summary module description:

The objective of the Private Equity and Venture Capital module, which is delivered at the ICMA Centre, is to develop students’ appreciation of the practical aspects of investing by private equity and venture capital firms, understanding the dynamics between the venture capital investor and the entrepreneur, and also the practicalities of raising PE&VC funds from institutional investors. 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 (including management buyout transactions) as well as the relationship between the private equity or venture capital firm and its own investors (limited partner institutions). This is a highly practical module; extensive use will be made of case studies and a group project in addition to guest seminars from invited experienced practitioners and entrepreneurs.

Aims:

To familiarise students with the practicalities of the private equity and venture capital investment process.ÌýÌýÌýÌý

Assessable learning outcomes:

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

• Explain the characteristics of private equity as an alternative asset class and discuss the different strategies for establishing a private equity or venture capital fund.Ìý


• Discuss the current issues and challenges facing the private equity and venture capital industry.ÌýÌý


• Be able to prepare a business plan for the purpose of raising finance and to appraise it as an investment executive.Ìý


• Describe the composition of a private placement memorandum for raising a private equity fund and explain the basic terms and conditions which codify the obligations of, and the relationship between, the general partner and the limited partners.


• Describe 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.


• Explain how the private equity and venture capital firms monitor and aim to add value to their investments.Ìý


• Describe 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 skills as they discuss the case studies and prepare a business plan in their groups.

Outline content:

• What is private equity and venture capital?ÌýÌý


• How private equity and venture capital funds workÌý


• Business planning processÌýÌý


• Selecting and approaching private equity and venture capital firmsÌý


• Venture capital and the venture capital investment processÌý


• Management buyoutsÌýÌý


• The due diligence processÌýÌý


• Different strategies for investmentÌý


• Living with the private equity or VC investorÌýÌý


• Exit routes, including IPOs and trade salesÌý

Global context:

Trends in private equity and venture capital are covered in the global context.Ìý

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). Guest speakers from the venture capital industry and/or entrepreneurs will be invited to discuss practical issues related to the topics covered on the course. Students will engage, i n groups, in the preparation of a business plan.

Summative assessment- Examinations:

2 hours closed book written examination.

The examination for this module will require a narrowly defined time window and is likely to be held in a dedicated exam venue.

Summative assessment- Coursework and in-class tests:

One coursework exercise carried out in self-enrolled groups of 4 to 6 students,Ìýas noted above, 5,000 words +/- 10%, excluding appendices to be prepared by the group. To be submitted by the group by the last week of lectures.

Formative assessment methods:

Feedback provided on coursework business plan project prior to written examination.ÌýÌý

Penalties for late submission:

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

• 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;Ìý


• 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.Ìý

The University policy statement on penalties for late submission can be found at: http://www.reading.ac.uk/web/FILES/qualitysupport/penaltiesforlatesubmission.pdfÌý

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Assessment requirements for a pass:
40%

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

Additional Costs (specified where applicable):

Required text books: Available free of charge on BlackBoardÌýÌý

Last updated: 22 September 2022