Venture Investing

Selecting, valuating, structuring, monitoring, and exiting venture investments

MBS e-Course by Vadim Kotelnikov, Founder, Ten3 BUSINESS e-COACH - Innovation Unlimited,

The core e-coaching guide:

Venture Investing Coach for Private and Corporate Investors






Setting Your Goals

NLP - the Technology of Achievement

Decision Making

Effective Communication


21 Secrets of Self-Made Millionaires

Your Business

Venture Funding Stages

Understanding Venture Financing Chain

Investment Opportunity Selection Criteria

Think Pad Inc. - a Home Run (case study)

Ways of Realization of Financial Returns

Venture Planning Chart

The Funding Round Chart

First-Round Funding: Recent Trends in Silicon Valley

Business Plan: What Every Investor Wants to Know

Business Plan Evaluation by Investors

Business Angels

Business Angel Syndicates

Corporate Investing in External Ventures

Corporate Investing through Venture Capital Firms

GE Equity (case study)

Nortel Telecom (case study)

Captech Corp. of Mitsubishi Corp. (case study)


How To Get Well Prepared Clients (just direct them to this page)

Spotting Trends

Search for Opportunities - Tips for Angel Investors

How Investors Read a Business Plan

Evaluating Management Teams

Due Diligence

Sample Due Diligence Request and Check List

10 Most Common IPR Mistakes During Venture Capital Due Diligence

Business Valuation

Valuation of a Start-Up Company

Valuation Quantification Techniques

How To Structure Your Deal

The Key Terms for Most Seed Investments

Typical Terms of Preferred Stock

Model private stock purchase agreement

Private Placement of Convertible Stock: Sample Term Sheet

Venture Acquisitions

Acquisition Letter Sample







 Why MBS in Venture Investing?

Main Target Users

  • Private investors - first-time or would-be business angels

  • Non-financial corporations - first-time or would-be venture investors

  • 'Neophyte VC funds' that are at an early stage and whose teams are managing their first fund

Growing Corporate Venture Capital

In today's new entrepreneurial economy, the real shareholder value is created by companies whose corporate strategies include well-developed venture strategies. Partnership between small innovative firms and large corporation is mutually beneficial. While entrepreneurial companies can identify  technology and market opportunities and move faster to capitalize on them, they can achieve enormous leverage through technology and distribution agreements with large global corporations.

In United States in 1994, only 2% of venture capital investments was corporate venture capital, but in 2000, corporate venture capital accounted for 17%, nearly $20 billion.

By 2000, spinouts, a new form of creating and financing a high-tech company has become more popular. This novel approach has a number of advantages over a merger or acquisition and it plays an increasingly high role for high-tech companies.

Growing Market of Business Angels Early Stage Private Investors

As investments of formal venture capital (VC) companies in early stage start-up companies have been decreasing since 1999, the role of private venture capital investors, such as business angels, has been increasing. In US, the average VC funding per deal grown from US$ 2.7 million in 1994 to US$ 13 million in 2000. These days, VC companies prefer to invest in larger deals at a later development stage. At the same time, the number of business angels in growing. In US, in 2000, business angels put US$ 40 billion behind 50,000 deals. The number of business angels in US is estimated to be 400,000. This number grows at an average rate of 20% per year. In Europe, the estimated potential of annual angel investment is as high as US$ 30 billion.

Though the investment potential of business angels is significant, the size of the angel market could potentially become 10 to 20 times larger. It is estimated that only 7% of potential business angels in US invest in start-up ventures. The remaining 93% are virgin angels who would like to invest but don't do it for a number of reasons. Main reasons why business angels do not do more investment are:

  • lack of proposals matching their investment criteria

  • lack of quality business proposals

  • lack of trust in the entrepreneur or management team

  • lack of experience in valuating and pricing deals, and

  • lack of experience in due diligence and monitoring.