Section VIII - Venture Capital Industry (cont'd)

2. Due Diligence Analysis
   1. Fundamentals of Analysis
      1. Sources of Capital
      2. Six Simple Questions
      3. Fundamental Requirements of a Business Plan
   2. Dynamic Fit
      1. Value Proposition
      2. Team
      3. Unit Economics
      4. Technology / Intellectual Property
      5. Sales / Marketing
      6. Partners
      7. Competition
      8. Market Opportunity
3. Mechanics of Building Value
   1. Capital Requirements of a Business / Debt Facilities
   2. Board Representation
   3. Management Team
   4. Strategic Direction
   5. Partnerships / Advisors

Section IX - Entrepreneurial Finance

1. Elimination of Risk
2. Capital Structures
   1. Preferred Stock vs. Common Stock
      1. Liquidation Preferences
      2. Pro Rata Investment Rights
   2. Employee Stock Option Pool
3. Shareholders Agreement
4. Stock Purchase Agreement
5. Board Representation
6. Vesting/ Dilution
7. Minority Shareholders Rights
   1. Illiquid Assets
   2. Lack of Control
      1. No Longer in Charge
8. Liquidation
   1. Illiquid Assets
   2. Sale / Merger / IPO / Shutdown
9. Mind of the Venture Capitalist

Guest Speaker

Bryan Barksdale, General Counsel, Bazaarvoice 

Reading Assignment

"Complexity", Mitchell Waldrop (Chapter 6)