| Venture Capital Training |
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Training Outline
I. Overview of the venture capital process
a. Introduction to venture capital investing
b. Venture capital fund organization and structure
c. Raising a private equity fund
d. Venture capital statistics
e. Business evaluation and deal selection
f. Due diligence
g. Valuation analysis
h. Investment structuring and the term sheet
i. Corporate governance and monitoring
j. Problems with venture investing in China
II. Venture Capital Statistics in the United States and China
a. Sources of venture capital funds
b. Uses of venture capital funds
c. Growth of funds under management
d. Growth in the number of VC funds
III. Business evaluation and deal selection
a. Management team
b. Technology
c. Competition/Barriers to entry
d. Attractive Industry
e. The importance of marketing
IV. Due diligence
a. Financial due diligence
b. Technical due diligence
c. Operations due diligence
d. Law due diligence
e. Some key factors while conducting D.D.
V. Valuation analysis
a.
b. Asset valuation
c. Earnings valuations
d. Discounted cash flow
e. The Venture Capital Method
f. Calculations
（1）Share purchase price and share number calculations
（2）Pre-value & post-value
（3）Value analysis with ESOP
（4）Value analysis with multi-round investment
（5）Value analysis with adjustment of earning projection
（6）Value analysis with preferred stocks
VI. Investment structuring and the term sheet
a. Asset protection through BVI and Cayman Island companies
b. Legal commitment
c. Confidentiality/ non-shop clause
d. Summary of terms
e. Dividend rights
f. Liquidation preference
g. Redemption rights
h. Conversion rights
i. Automatic conversion
j. Anti-dilution provision
k. Protective provisions
l. Rights of first offer
m. Right of first refusal
n. Information rights
o. Inspection rights
p. Registration rights
VII Definitive Documents
a. Stock Purchase Agreement
b. Shareholders Agreement
c. Amended Articles of Association
VIII. Post-investment management /Corporate governance
a. Responsibility of the board of directors
b. Definite of directors
c. The target of corporate governance
d. Cases
e. Management report
f. Corporate governance and investors
g. Corporate governance and market
h. Corporate governance and supervisors
i. Corporate governance and the management team
IX. Exit Scenarios
a. IPO
(1) Select investment banks
(2) The submission of S-1 or S-3 form
(3) Prospectus
(4) Road Show
(5) Pricing issues
(6) IPO marketing
b. Mergers & Acquisitions
X. Limited Partnerships
a. GP, LP, LLP and LLC
b. Legal structure
c. Why limited partnership?
XI. Other VC Capital organization forms
a. VC Corporate
b. LBO/MBO funds
c. Venture Leasing
XII. Legal Documentation of Limited Partnerships
a. Fund size
b. Promised term
c. Economic life
d. Advanced termination
e. The role of general partners
f. General Partner contributions
g. The obligation and responsibility of LP
h.
i. The transfer of the LP equity
j. Management control
k. Advisory committee
l. Investment focus
m. Compensation
n. Reward arrangement for LP
o. Restriction of fund management
p. Restriction on GP
q. Relationship between LP and GP
r. Manner structure of LP agreement
XIV. Operation Agreement among GPs
XV. Management Agreement between LP Fund and Fund Management Companies
XVI. Venture Capital Management Company
a. Organizational structure of VC management company
b. Authority of different levels of managers
c. Incentive mechanism
d. Relationship between VC Management Company and VC fund. Relationship between VC management company and GP
XVII. Cases Discussion
a. List of terms
b. Stock purchase agreement
c. Shareholders agreement
d. Amended articles of association
e. Financing memorandum
f. LP agreement
g. Operation agreement
h. Fund management agreement
i. Case of raising a VC fund
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