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7:30 a.m. to 8:30 a.m. Continental Breakfast
8:30 a.m. to 8:45 a.m. Agenda Review and Introductions
8:45 a.m. to 10:15 a.m. Learning Experiences
We will share short stories about unusual problems and how we
have solved them. The subjects can cover deals, partnership issues,
fund raising…anything that was a learning experience that would
be useful to the group.
Alternatively, we encourage you to discuss a situation where there
wasn't an obvious solution or where the problem wasn't resolved
to your satisfaction. This is your chance to tap the creative experience
of your fellow venture capitalists.
Since we want group discussion and multiple anecdotes, please confine
your description of the problem to about three minutes or less.
10:15 a.m. to 10:30 a.m. Break
10:30 a.m. to 11:00 a.m. Learning Experiences, continued
11:00 a.m. to Noon. The Internet and Its Future for Venture
Capital
Speaker: Steven R. Horen
Internet Services
NationsBanc Montgomery Securities
600 Montgomery Street
San Francisco, California 94111
What Internet revenue models have worked and which ones are unproven?
What types of Internet companies and opportunities should early
stage venture funds consider? Which ones should we avoid? If we
invest, what is necessary to increase the probability for success?
Noon to 1:15 p.m. Lunch
1:15 p.m. to 1:30 p.m. The National Venture Capital Association
Research Initiative
Speaker: John Taylor
Director of Research
National Venture Capital Association
1655 North Fort Myer Drive
Suite 850
Arlington, Virginia 22209
We will receive a brief update about the National Venture Capital
Association's Research Initiative. Mr. Taylor will discuss the purpose
of the initiative and how it plans to provide advanced learning
and data for our industry.
1:30 p.m. to 2:45 p.m. The Investment Process
How do we manage it? What are we doing differently today than we
were doing several years ago?
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COMPETITION AND PRICING
What is the competitive climate for seed and early stage deals?
What pricing are we experiencing? What strategies are we employing
to cope with competition?
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SYNDICATION
As successful seed funds get bigger and as larger funds move
to earlier stages of investing, how and with whom do we syndicate?
Who does deals without an initial syndicate? For those who syndicate,
when you start the syndicate process, whom do you include, and
how do you divide the financing?
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SCREENING OPPORTUNITIES
Does the partner who originates an investment opportunity a
deal screen it, or is it assigned to an associate or a partner
with special industry expertise? When and how are deals discussed
in partnership meetings? How often do we have partnership meetings
and what is their duration? What written materials are provided
at what stage of the process?
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DUE DILIGENCE
How do we validate markets, management, technology and other
criteria? How many customers, distributors and other market
sources do we call? How many reference checks do we conduct
on management? Is the work shared in the partnership and the
syndicate? If so, how? When are portfolio companies, consultants
and other outsiders used?
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NEGOTIATION OF TERMS
At what stage do we provide a term sheet? Is it contingent on
due diligence? If so, how often have we not gone forward? In
addition to valuation, what terms do we consider deal killers?
When do we surface these issues to qualify an opportunity?
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RESERVES AND INVESTMENT SIZE?
How much do we reserve for follow-on investments? How many deals
do we do per fund, per partner? How scaleable is seed and early
stage investing? How much can we increase the average investment
size and still produce the same rate of return?
2:45 p.m. to 3:00 p.m. Break
3:00 p.m. to 3:45 p.m. CEO Compensation, Recruiting Challenges
and Entrepreneurs in Residence
We will review and discuss our combined experience about CEO
compensation, recruiting in the current environment and the newer
EIR, entrepreneurs-in-residence, programs. Have EIRs worked? What
do they cost? Also, we will discuss creative ways of compensating
CEOs - both methods that proved effective and ones that backfired.
3:45 p.m. to 4:15 p.m. Update on the Fund-Raising Climate
Fund managers who have recently finished fund-raising will discuss
the current environment for early-stage funds, including who is
investing, who isn't, significant new terms required by limiteds,
general perspective on smaller early-stage funds, and time and cost
required to raise the fund.
4:15 p.m. to 4:45 p.m. Entrepreneur Side-by-Side Funds
Several partnerships have formed side-by-side funds, populated
by entrepreneurs and senior executives. Their purpose is to create
deal flow, provide for increased fund exposure and to serve as sounding
boards for investment opportunities. The group will discuss the
pros and cons of these partnerships, how should they be managed
and what reduced carried interest and/or management fees are appropriate.
4:45 p.m. to 5:00 p.m. Conference Wrap-Up
5:00 p.m. to 7:00 p.m. Reception
Venture Investing 1998
Stanford Court Hotel
Hosted by Hambrecht & Quist
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