Real Venture Capital

RICHARD THOMPSON is a Cambridge science graduate who subsequently qualified in both chartered engineering and management consultancy. He has been the co-founder and chairman of several successful venture capital firms over a thirty year span and is still active in the sector. He has a wide experience of international business.

' Richard's book is the best and most wide ranging study of venture capital that I have read. His analysis of the key factors involved in successful venture capital is masterly. His description of the essential relationships between the venture capitalists, entrepreneurs, Boards of directors, academics, investors and others, is a model of perception and clarity. Richard's extensive experience of US venture capital has enabled him to explain the importance of, and the way to achieve, international growth especially for British and European science- and technology-based companies. He makes an unanswerable case for a major increase of resources to support venture capital, particularly companies established to exploit the results of the outstanding science and technology research in the UK. Real Venture Capital is a unique and highly readable guidebook for all those involved in venture capital, or aspiring to be so, and it should have a place on the desks, not only of venture capitalists, but also of institutional investors, academics, ministers and civil servants, financial journalists, angel investors and large technology company executives. As the international markets for new science and technology-based businesses expand in future not least in major markets in the Far East, Real Venture Capital provides a practical and comprehensive source of good advice both on what to do and what to avoid.' - Roger Brooke O.B.E. Founder, Chief Executive and then Chairman of Candover Investments plc. 1980-99 'Richard Thompson has been at the coal face of British venture capital for over thirty years. Combining his analytical training as an engineer and a management consultant with a deep knowledge of the technology and health care industries, he has achieved a formidable long-term record. Helping grow businesses in these areas is both more difficult and more exciting than mere financial engineering, however fashionable, which has catapulted private equity so stridently into the public arena. Anyone with an interest in building a business and creating employment and Economic Value Added should read this book.' - James Joll, Chairman of the Pearson Group Pension Fund and formerly the Group's Finance Director 1985 96 'My regret is that Richard had not written Real Venture Capital when I started investing in venture capital. It is full of common sense and provides the fundamentals for successful venture capital investment. Spiced up with some sharp and pertinent one liners, it is an excellent and concise read' - Stewart Newton, Founder and Chairman of Newton Investment Management Ltd 1977-2000 'I am very happy to endorse Richard Thompson's excellent book on venture capitalism. I have known him over many years and admired what he has done to support early state companies, in particular providing a bridge to Anglo/US technology. I have been a passionate believer in helping start and encourage early stage companies and I believe that this book will help a large number of would-be entrepreneurs to avoid some mistakes and to build on the many constructive suggestions in the book.' - Michael Stoddart, Managing Director and then Chairman of Electra Investment Trust plc 1974-99

• Preface Introduction and Rationale Background and History of Venture Capital Other Forms of Private Equity Venture Capital Definitions and Approaches Growth Markets and International Expansion The Commercial Application of Technology Products Entrepreneurs, Managers and Directors The Management of Resources Financial Philosophy and Control Financing and Its Structures Start-Ups Second-Stage Financings Third-Stage Financings Turnrounds Strategic and Other Alliances Flotations Acquisitions and Mergers Trade Sales Case Studies International Niche Businesses International Development International Financing Fund Structures and Management Investment Processes Investment Examples Future Developments The Role of the Venture Capitalist The Role of the Investor The Impact on the Economy Conclusions and Lessons Appendix I - An Early Paper on Venture Capital Appendix II - The Healthcare and Technology Markets Appendix III - Company Boards: Their Role and Structure Appendix IV - Investment Memorandum Formats Appendix V - Examples of Investment Memoranda Glossary of Terms Index