Venture Capital and Private Equity

Venture Capital and Private Equity

Executive Summary

This research paper focuses on how to venture into private equity funds, how to manage this type of equity, how and why it dominated in the stock market, especially when it was practiced in Poland. The research paper also displays methodologies and steps of how to become successful in business and other firms either as a successor or a co-founder. All these have been described below

An Overview

The document is all about Buckley, how he become a successful person in venturing into private equity funds. The effort that he inputs in his daily activities when together with his friend Conn rates them as successful people in the global economy, including Capital generation in stock market shares. Buckley and Conn decide to reside in Poland after identifying that the region is rich in entrepreneurial activities, where they invest and venture into. They start and orient their firm called Innova Capital, which does well and attracts more funds from other investors who later join and partners with them.

Question one

• One of the problems in a succession of private equity funds is that there is no one-size-fits-all solution. This is because every firm, organization, and companies have their different culture and size expressed historically.
• Private equity funds are termed as personal driven. The personality of an upper-management person in a firm played a significant role—the substantive attribute of these people positively impacted firms. Succession from one employer to another, on the other hand, have impacted negatively, especially situations where one person succeeds another and noticed that he has no good attributes. Since he is a top manager in the firm, his decisions will be executed by junior employees hence outputting negatively to the firm.

Best practices

• Most firms have made sure that succession is done as early as possible before the person being succeeded departs the organization so that they cope up with his or her normal doings as early as possible hence maintaining the trend of the firm
• Limited partners have adopted and enacted the strategy of using a ‘key man’ of which they have introduced them in their Limited Partners agreement hence guarding them against changes and challenges that the firm might face.

Question two

• It is because at these times Poland enjoyed a monopoly in Europe for displaying growth positivity in of GDP accruing to +1.6%² hence enabling most investors to be successful, including Buckley.
• Poland recorded an exemplary output in the global stock market, having the highest capital market share, which attracted Buckley to venture in hence becoming successful.

Steps were taken

• Buckley and Conn left CAL to go and manage Poland Partners incorporated with U.S ventures and OPIC.They contributed $64M and undertook fourteen deals, which concentrated on diversifying chances of growth in Poland.
• Buckley and his colleague Conn decided to shift their operations to mid-market provided by Poland hence increasing success chances and also creating opportunities for their later-stage investments.
• They re-negotiated agreement with the shareholders of Poland Partners Management hence securing operational control of management company.

Adopted Strategies

• Co-founding a new entity called Innova Capital.
• I am studying the stock market trends before venturing into a new project.
• It is establishing new projects that have the noticeable potential of outputting good revenues.
• Working as a team as Buckley worked with his friend Conn

Question three

Krawczyk is receiving a letter of offer requesting him to go and create an office and run it as their CEE effort. An agreement document was provided by Conn, one of the founders of Innova Capital, as a solution to the problematic concept hence used as a solving weapon.

Negotiations

The team negotiated about making necessary changes to make their institution prosper.

I am drafting out a skeleton-like framework of a deal.

She is settling that they want to stay together.

Thinking about the long term of their institution.

Challenges faced

Implementing the agreement posed a problem since it took two other years.

Acquiring humility and mutual respect from fellow founders

Question four.

The highlights include;

Ownership and Governance, Carry, Excess Management Fees, and ownership evolution.

About carry aspects in the institution, the  Active point was that the remainder was to compensate partners and to invest staff for working on the fund.

Group points pointed out that 6 marks would be owned by Innova Group since they are the founders of successive funds.

It was finally agreed that full times partners have to receive 1.5 Active points. Old Fart to receive an additional 25% of the 6 Group points for a total of 3.0 points. Each new Fart to earn 1.0 Group points for a total of 2.5 points.

Question five

It is because they had to complete the Innova/4 fundraising first before proceeding, and they also had various advanced ventures that existed in the pipeline hence need to be taken care of first.

• The 2009 agreement was almost agreed with every member compared with the one of 2007
• It was precise and straightforward than 2007
• Signed and accepted by the majority

Question six

No. This is because out of five executives of the firm, only three executives were happy.

• I would involve and take legal measures such as including authority bodies to verify and sign the successive documents to show that a succession of various positions at my place has taken place.
• Members must be competent, thoroughly talented, and equipped with skills to be given a succession.
• Succession will be taking place after a specified period of time.

Works Cited

Gottlieb, Richard. The Directory of Venture Capital & Private Equity Firms, Domestic & International. Grey House Pub, 2010.

Private Equity and Venture Capital: A Legal Guide. 2003.