Summary of The Venture Capital Cycle

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The Venture Capital Cycle book summary
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Rating

5 Overall

5 Applicability

6 Innovation

5 Style

Recommendation

The Venture Capital Cycle is a thorough overview of the venture capital market that will be edifying to those who know little about the mysterious methods of private equity financiers, but self-evident to those with a background in corporate finance. Readers who have worked in or studied finance already are familiar with the tidal cycles that govern the flow of capital into early-stage companies, as well as the process through which money moves from institutions and individuals to fledgling enterprises. But getAbstract strongly recommends that entrepreneurs read this book, which provides an exhaustive tour that will answer many - if not all - of your questions about where venture capital comes from, how you can get a hold of some, and how your life and business will change after you do. And if, along the way, you think that the authors sound too much like professors with their dense, academic prose, you’re right.

In this summary, you will learn

  • Why venture capital exists;
  • Why venture capitalists are attracted to high-risk investments;
  • How venture capitalists can make handsome profits; and
  • Why IPOs that are backed by venture capitalists outperform those that aren’t.
 

About the Authors

Paul Gompers is an associate professor of business administration at Harvard Business School. Josh Lerner is professor of business administration at Harvard Business School. Both are faculty research fellows at the National Bureau of Economic Research.

 

Summary

The Venture Capital Surge
Venture capital has boomed over the past two decades. Venture funds were essentially nonexistent in the mid-70s, but by 1998, they counted $17 billion in annual inflows. Venture capitalists backed high flyers, including Apple Computer, Microsoft, Intel, Lotus, ...

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