An introduction to venture capital and private equity


Private equity (PE) has become one of the world’s largest asset classes for investors. It is estimated that 10 percent of UK private sector workers work in companies connected in some way to PE. This course covers institutional investing into private, rather than public listed, companies, where the shareholder can then not expect an exit for at least 3 to 10 years.

The course defines the types of PE (Venture Capital (VC), growth capital, Leveraged Buy Out (LBO)) and talks about the role of PE in a diversified investment portfolio. It explains how PE funds are constructed and how they conduct deals including the decision making process before investing and areas of due diligence conducted. The goal of a PE investor is a high Internal Rate of Return (IRR) on deals and the course outlines what IRR and Multiple of Invested Capital (MoIC) is and how it is achieved.

Learning Outcomes

On completion of this course, you will have a greater understanding of:

  • What is Private Equity (PE)?
  • How the main types of PE differ – Venture Capital, Growth Capital, Leveraged Buy Out (LBO)?
  • Some of the main participants in the London PE industry. Examples of large UK buyouts and what are Unicorns?
  • The role of PE in a diversified portfolio of assets and publicly available performance data for PE funds.
  • The structure of PE funds – Limited Partners (LPs) and General Partner (GP). What are the fees and what is carried interest?
  • PE transaction process up to investing in a company: sourcing, due diligence, negotiation.
  • What the terms Internal Rate of Return (IRR) and Multiple of Money (Multiple of Invested Capital – MoIC) mean
  • What pre money and post money valuations in VC funding rounds mean. How they are related
  • How a PE firm increases IRR for an investment? What is the principle of leverage in structuring LBOs?
  • What Sweet & Sweat Equity is. What ‘hurt money’ is. What a ratchet is.

Authored By

Jackie Sheldon is a freelance senior lecturer specialising in designing, writing and delivering company law courses. Jackie qualified as a corporate solicitor in the City at Taylor Wessing before moving to the North West and working at Pannone LLP and Hammonds. Jackie has been teaching for over 9 years, is a Fellow of the Higher Education Academy and has a Post Graduate Certificate in Professional Education. Jackie is currently delivering modules on the Legal Practice Course in Manchester together with writing and presenting professional development courses nationwide on current company law topics.

CPD Points: 1

CPD Duration (hours): 1

Access: 12 months from purchase date

Price: £30.00 (excludes VAT)