What is a VC?

A venture capitalist is a private equity investor that provides capital to companies exhibiting growth potential in exchange for an equity stake

 

Describe the stages in the process of funding from a VC.

Wealthy individuals, insurance companies, pension funds, foundations, and corporate pension funds may pool money together into a fund to be controled by a VC firm

 

What is the role of the "founder" in a VC funding?

Look for a long term VC and build a relationship with the VC, the founder must understand the financials and key metrics of their business.

 

What is a " Unicorn", a "Dragon Egg" and a "Walking dead" in terms of VC investments?

A unicorn is a company with a valuation over a billion dollars. Dragon eggs are a company with the potential to become a billion dollar company. a walking dead investment would be a company that makes consistent gains but not with much potential.

 

How does a VC identify and select a specific deal to fund?

Analyzing the management team, business concept and plan, market size & opportunity, and risk judgement all play a role in making this decision for a VC. VC's will constantly look at data and analyze charts to see which companies are doing better than others. Make sure you have a network in place to be able to reach out to companies before they are publically released on demo days. VC's look for tech, team, and product work and how fit they are to continue sustaining as a successful company. 

 

What is a "term sheet " and what the " final doc" ?

A term sheet is a bullet point document outlining the material terms and conditions of a potential business agreement, establishing the basis for future negotiations between a seller and buyer. These include: Pre- & Post- money valuation, liquidation preference, board of directors, protective provisions, right of first refusal, pro rata, drag along, employee option pool, and no shop agreement.

 

What is a competitive round?

2 or 3 other VC's are competing to reach the agreement with the company

There are 3 ways to push a term sheet onto a founder, one way is by being super aggressive and making short deadline, the second is bringing up the term sheet last compared to the other VC's, 

 

What are the top 9 venture capital firms specializing in the Pharmaceutical and biotech companies mentioned?

1. OrbiMed (42)
2. ARCH Venture Partners (30)
3. Polaris Partners (26)
4. Atlas Venture (25)
5. Deerfield Management (24)
6. NEA (23)
7. Novartis Venture Fund (22)
T-8. GV (21)
T-8. Foresite Capital Management (21)

 

What is the role of venture capital firms in these industries?

VC's role in these industries is to provide capital to a company because the VC has high hopes and expectations that the company is a dragon egg. 

 

Why?

This is a good time for Pharmaceuticals & biotech companies because of the global pandemic. With companies rushing to make vaccines, they are going to need the capital in order to do extensive research and get updated equipment.

 

Why did Silver Lake convert Debt to Equity?

Silver lake had aquired notes from amc back in 2018 and has been on a steady decline ever since. The pandemic has shut down over 1000 stores and the company was near bankruptcy. The recent surge drove up sales so that investors can sell while the price is high, then return the gains back into the company to get them out of debt. 

 

Inlcude your comments about AMC stock activity in the weeks following the publication of the article.

Amc had peaked at 20 in the midst of the hype. Ever since then, the price of the stock hovers between 12-8$. i do not think the price will go up if social distancing is going to be something we normalize. If society went back to noral, or how it was before, then they would start seeing more revenue come into the company thus the potential becomes profitable.