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12 Cards in this Set
- Front
- Back
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Return on Capital
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An adjusted operating profit divided by operating assets; the periodic return on the assets under management
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Return on Investment
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Defined in the same way as the return on capital except that the profits and assets are measured only for the newly invested capital, not the accumulation of all investments
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Optimal Investment for a VC fund
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Where the ROI is exactly equal to the cost of capital "r". This ensures that although marginal investments do not earn economic profits, the earlier investments do.
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Star Fund
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A VC fund with committed capital of at least $50MM and a value multiple of five or greater
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Value Multiple
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Also known as the investment multiple, realization ratio; the amount distributed to the limited partners of a fund, expressed as a multiple of each dollar contributed by the partners (i.e. if the firm has $100MM in committed capital and the LPs receive $200MM back, the value multiple is 2.)
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Committed Capital
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The total amount of capital promised to the VC fund by the limited partners
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Superstar Fund
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Firms that have at least $50MM in comitted capital and a value multiple of 10 or greater
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Sand Hill Road
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A street in Menlo Park that is home to many of the world's top VC firms
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Local Network Effects
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Firms in the same industry co-locate to take advantage of the benefits of the local human capital and other shared resources
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Syndicate
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When several VCs invest in a financing round, with the lead investor investing the most and generally taking the board seat
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VC Monitoring Methods
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Board Representation
Corporate Governance Human Resources Matchmaking Strategy |
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Corporate Governance
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Defines the power sharing relationship between shareholders and managers
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