4 ms·
I don't see the problem really, if it's a major hit but still unlisted, can't the fund simply shift the shares to its investors when it is wound up? There's the
by kryptiskt 14y ago
I don't see the problem really, if it's a major hit but still unlisted, can't the fund simply shift the shares to its investors when it is wound up? There's the small matter of valuing them. But a piece of a successful company will be valuable even if it's private with no IPO on the horizon.
- rpm4321 14y agoIf a young founder makes it known that he's in it for the long haul with no possibility of IPO/acquisition - we're talking decades - presumably the value of their shares would be depressed significantly. It's a bit like having the deed to some prime real estate on Mars.
- refurb 14y agoMost limited partners who give their money to VCs are university endowments and pension funds. If you're the manager of a pension fund, you want cash back once the fund shuts down, you certainly don't want a piece of paper saying you own X number of shares in a company. I don't know the details of this deal, but suffice to say, the VCs already know what their exit plan is. I know in the biotech space there is a trend towards exits other than acquisitions or IPOs. You basically create LLCs and any returns are funnel back through to shareholders (through dividends??).
- rpm4321 14y agoI'd be fascinated to read any sources you might have regarding the Biotech LLCs. Thanks in advance.
- refurb 14y agoHere is a link:http://lifescivc.com/2011/05/structuring-a-biotech-liquidity-thesis/ http://lifescivc.com/2011/05/structuring-a-biotech-liquidity... Go down the page to "Standalone LLC model". Basically the LLC is used to "pass through" revenue from licensing deals and such to the LPs.
- rpm4321 14y agoThanks refurb, appreciate it.