Maclean Palmer strode out onto a Martha’s Vineyard beach to enjoy the warm sun. That August afternoon in 2000, Palmer and the four partners he had chosen in his quest to start up a $200 million private equity fund had made a collective decision that would change their lives forever. 

In less than 2 months, the partners would quit their jobs, sell their homes, and move their families to Boston to begin crafting an offering memorandum for the fund. With 2000 shaping up to be the largest venture fund-raising year in history, they felt they could not have picked a better time to strike out on their own.

Preparation Questions 

1. Evaluate Maclean Palmer’s decision to create a new venture capital fund and his progress to date. 

2. What do you think of his team? 

3. Outline the major risks you see, the due diligence questions you would focus on, and whom you would contact as a pension fund analyst or prospective limited in the fund. 

4. Outline in detail what you would include in a private placement memorandum to market the fund to potential investors. 

5. Who should invest in a venture capital fund?