"Despite the increasing importance of the venture capital industry, until now there was no reference that could provide practitioners with a specialized grounding in finance. With clear explanations and practical models, Metrick's book can fill this gap. I enthusiastically recommend this book to all venture capitalists."
—Ted Schlein, Partner, Kleiner Perkins Caufied & Byers
Book Description
The Financial Principles Every Venture Capitalist Needs To Master
In Andrew Metrick’s Venture Capital and the Finance of Innovation, future and current venture capitalists will find a useful guide to the principles of finance and the financial models that underlie venture capital decisions. Assuming no knowledge beyond concepts covered in first-year MBA course, the book will familiarize you with:
- The relationship between risk and return in venture capital
- Historical statistics on the performance of venture capital investments
- Total Valuation - the data and methods used to value a high-growth company
- Partial Valuation – how to analyze the special features of VC transactions such as convertible preferred stock, participating preferred stock, payment-in-kind dividends, and liquidation preferences
- A framework for modeling investment in "research and development"
- The relationship between strategy and finance
- Cutting-edge techniques such as Monte-Carlo analysis, real options, binomial trees, and game theory
