Private Equity and Distressed Debt Funds Emerging Role in Preventing and Participating in Restructurings

2017 ◽  
Author(s):  
Christopher Mallon ◽  
Shai Y. Waisman ◽  
Ray C. Schrock
Keyword(s):  
Private Equity ◽  
Early Stage ◽  
Leveraged Buyouts ◽  
Subordinated Debt ◽  
Investment Activity ◽  
Track Record ◽  
Development Cycle ◽  
Start Up ◽  
Wide Range ◽  
A Company

Private equity (‘PE’) investment and distressed debt investment covers a wide range of investment activity by pooled investment vehicles (ie, funds) in privately or publicly (through ‘take-private’ transactions or IPO’s) owned companies, using capital raised from institutional investors that are limited partners of the funds. Such investment activity can be broadly categorized according to the point at which the investment is made within the typical development cycle of a company: (i) initial venture capital provides seed capital for start-up businesses; (ii) growth capital assists early-stage companies with the growth of their operations; (iii) mezzanine financing, comprising the contribution of subordinated debt or preferred equity, provides further capital to more established businesses; (iv) leveraged buyouts (‘LBOs’) are pursued to acquire portfolio businesses with a proven track record of sales and financial performance; and (v) distressed debt investing (the focus of this chapter) which provides support to companies that are in financially precarious positions.

Kabbage: an innovative source of short-term business loans

2018 ◽  
Vol 14 (6) ◽  
pp. 716-735
Author(s):  
Michael Ozlanski ◽  
Emma Marie Fleck
Keyword(s):  
Short Term ◽  
Content Type ◽  
Secondary Sources ◽  
Business Press ◽  
Small Business Management ◽  
Start Up ◽  
Tangible Assets ◽  
Wide Range ◽  
Key Drivers ◽  
A Company

Synopsis New entrepreneurial businesses are one of the key drivers of innovation and economic development. However, one of their greatest obstacles is accessing capital, especially since they are often initially unprofitable and lack tangible assets in the first few years of operation. Since debt financing from banks can be difficult for them to obtain, their capacity for growth can be limited. This case introduces students to Kabbage, a company that reduced the barriers associated with start-up and microbusiness lending by using a fully automated, data-driven platform. Kabbage made instant decisions on whether these businesses should qualify for a line of credit by reviewing its clients’ electronic data, analyzed quickly and accurately using specific algorithms. Research methodology Given the applied nature of the case, the data were gleaned from a wide range of secondary sources, specifically popular business press which was verified for authenticity. Relevant courses and levels This case can be used in a variety of undergraduate courses. Some course examples include small business management, introduction to entrepreneurship or entrepreneurial finance.

scholarly journals Leveraged Buyouts and Private Equity

2009 ◽  
Vol 23 (1) ◽  
pp. 121-146 ◽  
Author(s):  
Steven N Kaplan ◽  
Per Strömberg
Keyword(s):  
Time Series ◽  
Empirical Evidence ◽  
Private Equity ◽  
Debt Financing ◽  
Leveraged Buyouts ◽  
Leveraged Buyout ◽  
The Future ◽  
Similarities And Differences ◽  
Investment Firm ◽  
A Company

In a leveraged buyout, a company is acquired by a specialized investment firm using a relatively small portion of equity and a relatively large portion of outside debt financing. The leveraged buyout investment firms today refer to themselves (and are generally referred to) as private equity firms. We describe and present time series evidence on the private equity industry, considering both firms and transactions. We discuss the existing empirical evidence on the economics of the firms and transactions. We consider similarities and differences between the recent private equity wave and the wave of the 1980s. Finally, we speculate on what the evidence implies for the future of private equity.

Venture capital and private equity industry in Hungary

2013 ◽  
Vol 63 (1) ◽  
pp. 23-42 ◽  
Author(s):  
Judit Karsai
Keyword(s):  
Venture Capital ◽  
Small Businesses ◽  
Private Equity ◽  
Western Europe ◽  
Stock Exchange ◽  
Debt Crisis ◽  
Early Stage ◽  
Government Interventions ◽  
Business Plans ◽  
Start Up

Hungary represents the second most developed venture capital and private equity (VC&PE) market in Central and Eastern Europe. This article is based on a detailed survey of the entire VC industry between 1989–2010. It demonstrates that while there was a relatively strong correlation between the allocation of capital to VC&PE funds and the capital flow into the Budapest Stock Exchange, the changes in investment activities were closely related to election years. Investments had been hampered primarily not by the shortage of capital, but by a lack of demand and attractive business plans. The article illustrates the different roles and approaches of global, regional and country VC&PE funds in Hungary. It points out that VC investments hardly satisfied their principal function or mission, namely to support innovative start-up and small businesses. Government interventions in the VC market proved to be ineffective as well. Similarly to the whole region, the Hungarian market profited from a transitory situation in the case of high-value PE transactions between 2007 and 2008, at the beginning of the crisis, when the investment problems in Western Europe had yet not extended to the CEE region. From 2009 onward, however, the crisis has resulted in a drop in investments despite the significant amount of uninvested capital accumulated in recent years. As to the prospects for 2013, the early-stage VC segment in Hungary is expected to flourish owing to the Jeremie funds, while the high-value buyout segment of the market will suffer from both the euro zone debt crisis and the loss of transparency in economic policy.

Elephant Bar Restaurant: Mezzanine Financing

2017 ◽  
pp. 1-29
Author(s):  
Susan Chaplinsky ◽  
Kristina Anderson
Keyword(s):  
Late Stage ◽  
Private Equity ◽  
Risk Mitigation ◽  
Faculty Members ◽  
Mitigation Strategies ◽  
Funding Source ◽  
Leveraged Buyouts ◽  
National Brand ◽  
Risk Mitigation Strategies ◽  
A Company

In November 2003, John Fruehwirth, a principal at Allied Capital, was considering a $20 million mezzanine investment in growth capital for Elephant Bar, a California restaurant chain. Elephant Bar had had some initial success in California but now Allied's investment committee had to wrestle with the question of whether the restaurant concept was strong enough to travel and become a national brand or whether it was mainly a “California Concept.” And if the concept was strong enough to travel, would Allied Capital be able to meet its underwriting standards? Because Elephant Bar is a company with aggressive growth plans, it is significantly riskier than traditional mezzanine investments. The case can be used in courses on venture investing to illustrate another funding source available to young companies. Traditional mezzanine financing is often used to provide a portion of the funding for late-stage investments, such as leveraged buyouts. The case can also be used in courses on private equity to illustrate the perspective, risk mitigation strategies, and return expectations of mezzanine investors.This case has a teaching note and a spreadsheet, which are available to registered faculty members.

scholarly journals Achieving venture returns through corporate spinouts

1969 ◽  
Vol 8 (4) ◽  
Author(s):  
Ashley Ledbetter ◽  
Ilan Zipkin
Keyword(s):  
Private Equity ◽  
Life Science ◽  
High Growth ◽  
Biotechnology Industry ◽  
Venture Capitalists ◽  
Know How ◽  
Entrepreneurial Spirit ◽  
Start Up ◽  
A Company ◽  
Parent Companies

As the biotechnology industry matures, the opportunity arises to establish companies by 'spinning out' undervalued but significant assets from larger biotechnology or pharmaceutical parent companies. Recognising the value in such assets and achieving rapid and meaningful returns on investments in corporate spinouts requires the infusion of the operational discipline of start-up companies along with the entrepreneurial spirit of a high-growth company. For this reason, spinout investing seems to be a natural fit with venture capitalists, whose perspective, experience and network can add tremendous value to a company at this stage. And yet spinout investing is also an area that can require significant cash commitments, which exceed the scale at which biotechnology venture capitalists have typically invested. With the emergence of a new breed of larger life science private equity firms that can now bring both the know-how and the capital to spinout investing, this is no longer an issue. Such investors are catalysing and driving the success of this growing class of investments to achieve the kinds of returns that will make these entities compelling opportunities for both parent companies and the limited partners of venture funds.

Outreach Networks: First Venture Round

2017 ◽  
pp. 1-7
Author(s):  
Susan Chaplinsky
Keyword(s):  
Venture Capital ◽  
Cash Flow ◽  
Private Equity ◽  
Early Stage ◽  
Venture Capitalist ◽  
Entrepreneurial Finance ◽  
Discounted Cash Flow ◽  
Start Up ◽  
Excel File

OutReach Networks is taught in Darden's Entrepreneurial Finance and Private Equity elective. A teaching note for this case is available for instructors as well as an Excel file for student analysis. This introductory case explores the venture capital (VC) and discounted cash flow (DCF) methods of valuing early-stage companies. OutReach Networks is an unusual start-up company in that it was profitable early in its development and did not have to seek VC funding to support its growth. The company has grown quickly and may soon be a candidate for an IPO. In November 2011, an experienced venture capitalist approaches the founder with an offer to invest $30 million in exchange for 30% of the company. While the founder sees some benefit from the VC's experience in preparing the firm for an IPO and the funding enabling it to scale more quickly, he cannot understand how the VC has arrived at this offer. The founder believes the funding should be worth no more than 15% of his firm. Potential reasons for the disagreement over the valuation are (1) differences in the founder's and investor's view of the company's risk, (2) disagreement over the appropriate set of comparable companies, and (3) differences in the methods used to calculate the percentage equity stake. The case is appropriate for use in courses covering entrepreneurial finance or venture capital.

scholarly journals Private Equity and Venture Capital – Preamble

2021 ◽  
Vol 8 (S1-Feb) ◽  
pp. 133-137
Author(s):  
Palash Khatri ◽  
V R Sudindra
Keyword(s):  
Venture Capital ◽  
Private Equity ◽  
Stock Exchange ◽  
Early Stage ◽  
Management Support ◽  
Market Returns ◽  
Stock Market Returns ◽  
Public Market ◽  
Start Up ◽  
Capital Funding

Private equity investment can offer very strong returns in comparison to any stock market returns or public market investment opportunity.Private equity invests in companies which are not listed in the recognized stock exchange. Every business comes across six stages of the life cycle which include; Development, Start-up, early-stage growth, expansion, maturity, and decline/crisis stage. PE firms invest in the initial three stages. In today’s fast-moving world with technological changes very great business plan may hit by various events and successes of companies. Private equity not only invests in companies, but they also provide management support and assist in the overall success of companies. The present study discussed on Birth of US Private equity, Indian Private Equity major players, steps in venture capital funding.

Impression management and legitimacy strategies: The BP case

2013 ◽  
pp. 35-64 ◽  
Author(s):  
Giovanna Michelon
Keyword(s):  
Impression Management ◽  
Management Practices ◽  
Legitimacy Theory ◽  
British Petroleum ◽  
Wide Range ◽  
Management Techniques ◽  
Disclosure Tone ◽  
The Empirical Analysis ◽  
A Company ◽  
Texas City

The aim of this paper is to study if and how impression management varies during different phases of the legitimation process, in particular during the legitimacy building and legitimacy repairing phases (Suchman, 1995). We aim at understanding whether and how the disclosure tone adopted by a company in the two different moments is diverse and thus functional to the intrinsic objective of the each phase. The empirical analysis focuses on the case of British Petroleum Plc. We investigated the impression management practices undertaken by the company both during the preparation of the rebranding operation, i.e. a situation in which the company is trying to build legitimacy; and during the happenings of two legitimacy crises, like the explosion of the refinery in Texas City and the oil spill in the Gulf of Mexico. The evidence appears in line with the theoretical prediction of legitimacy theory. Results show that while the company tends to privilege image enhancement techniques during the legitimacy-building phase, it uses more obfuscation techniques when managing a legitimacy-repairing process. Moreover, the analysis suggests that the company makes more extensive use of impression management techniques in the disclosures addressed to shareholders, investors and other market operators than in the disclosures addressed to the wide range of other stakeholders.

scholarly journals Photonic Crystal Nanobeam Cavities for Nanoscale Optical Sensing: A Review

Micromachines ◽  
2020 ◽  
Vol 11 (1) ◽  
pp. 72 ◽  
Author(s):  
Da-Quan Yang ◽  
Bing Duan ◽  
Xiao Liu ◽  
Ai-Qiang Wang ◽  
Xiao-Gang Li ◽  
...  
Keyword(s):  
Photonic Crystal ◽  
Optical Waveguides ◽  
Optical Sensing ◽  
Early Stage ◽  
Disease Diagnosis ◽  
Label Free ◽  
Quality Factors ◽  
Integrated Sensor ◽  
Early Stage Disease ◽  
Wide Range

The ability to detect nanoscale objects is particular crucial for a wide range of applications, such as environmental protection, early-stage disease diagnosis and drug discovery. Photonic crystal nanobeam cavity (PCNC) sensors have attracted great attention due to high-quality factors and small-mode volumes (Q/V) and good on-chip integrability with optical waveguides/circuits. In this review, we focus on nanoscale optical sensing based on PCNC sensors, including ultrahigh figure of merit (FOM) sensing, single nanoparticle trapping, label-free molecule detection and an integrated sensor array for multiplexed sensing. We believe that the PCNC sensors featuring ultracompact footprint, high monolithic integration capability, fast response and ultrahigh sensitivity sensing ability, etc., will provide a promising platform for further developing lab-on-a-chip devices for biosensing and other functionalities.

scholarly journals The effect of metabolism on the course of labor and the postpartum period in highly productive cows

2020 ◽  
Vol 17 ◽  
pp. 00256
Author(s):  
Murat Baimishev ◽  
Sergey Eremin ◽  
Kirill Plemyashov ◽  
Hamidulla Baimishev ◽  
Igor Konopeltsev ◽  
...  
Keyword(s):  
Lipid Metabolism ◽  
Postpartum Period ◽  
Early Stage ◽  
Antioxidant Properties ◽  
Antioxidant Systems ◽  
Dry Period ◽  
Blood Samples ◽  
Start Up ◽  
Significant Difference ◽  
Duration Of Pregnancy

The purpose of the research is to determine the etiopathogenesis of reproductive dysfunction in highly productive cows. For this, one group of cows was formed on the principle of paranalogs in the amount of 37 animals inseminated in the first sexual hunt after calving, followed by taking blood samples from them using the Monovet system, considering the duration of pregnancy. During the start-up period, blood was taken 1–4 days before calving and on the first day after calving. A total of 253 blood samples were examined. Subsequently, depending on the effectiveness of insemination, animals were divided into two groups. The first group included inseminated cows after the first insemination (20 animals), the second group included 17 unfertilized cows after the first insemination. Subsequently, blood was taken from animals considering the course of childbirth and the postpartum period. Blood counts were studied according to generally accepted methods using certified equipment. The study found that at an early stage of pregnancy, cows have a significant difference in lipid metabolism and in their peroxidation, in the state of antioxidant systems compared to unstable animals. In the process of pregnancy development in cows, there is a decrease in the level of total lipids and their class, and the accumulation of products of transoxidation of lipids is reduced. In animals with retention of the placenta, a low lipid metabolism and a higher level of peroxidation were established already in the dry period. After calving, this difference increases. The obtained data can be used to develop an algorithm for the prevention of postpartum complications in cows by using substances with antioxidant properties.

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