Maclean Palmer Case Study
Maclean Palmer Questions & Answers
1. Evaluate Palmer and his decision to create a new venture capital fund.
Maclean Palmer and 4 partners are about to quit their jobs and move to Boston with their families to begin crafting an offering memorandum for a private equity fund.
• Private equity is an asset class consisting of equity securities in operating companies that are not public trade on a stock exchange.
• Private equity investments are primarily made by private equity firms, venture capital firms, or angel investors, each with their own set of goals, preferences and investment strategies.
• The most common investment strategies in private equity are: leverage buyout, venture capital and mezzanine capital.
The venture capital investing process:
• Investing in compelling new business opportunities. The process began with conceptualization of an investment opportunity.
• Their aim was long term value creation for themselves and stakeholders.
The venture capital flow
• The general partners acted as organizers and investment managers of the fund
• The limited partners role in fund management and limited liability for any fund activity
Facts:
- The latest five year trends showed venture returns for ahead of lackluster buyout performance and failing U.S. blue chip prices.
- Year 2000 was shaping up to be a record breaking period for venture fund raising.
Palmer had an idea in 1999 for developing a fund for minority business. He created concept of the idea and kept it working on until he would find the moment to take a good decision. Palmer’s background is a plus with five years of direct investing experience and 17 years of operating experience at Point West Partners in San Francisco.
The moment was good when he saw an opportunity on minority business, while traditional venture capitalists were not focused in minority business due to considering it “too risky”. In order for the business to be successful he needed to build a team
1. Evaluate Palmer and his decision to create a new venture capital fund.
Maclean Palmer and 4 partners are about to quit their jobs and move to Boston with their families to begin crafting an offering memorandum for a private equity fund.
• Private equity is an asset class consisting of equity securities in operating companies that are not public trade on a stock exchange.
• Private equity investments are primarily made by private equity firms, venture capital firms, or angel investors, each with their own set of goals, preferences and investment strategies.
• The most common investment strategies in private equity are: leverage buyout, venture capital and mezzanine capital.
The venture capital investing process:
• Investing in compelling new business opportunities. The process began with conceptualization of an investment opportunity.
• Their aim was long term value creation for themselves and stakeholders.
The venture capital flow
• The general partners acted as organizers and investment managers of the fund
• The limited partners role in fund management and limited liability for any fund activity
Facts:
- The latest five year trends showed venture returns for ahead of lackluster buyout performance and failing U.S. blue chip prices.
- Year 2000 was shaping up to be a record breaking period for venture fund raising.
Palmer had an idea in 1999 for developing a fund for minority business. He created concept of the idea and kept it working on until he would find the moment to take a good decision. Palmer’s background is a plus with five years of direct investing experience and 17 years of operating experience at Point West Partners in San Francisco.
The moment was good when he saw an opportunity on minority business, while traditional venture capitalists were not focused in minority business due to considering it “too risky”. In order for the business to be successful he needed to build a team