QUESTIONS

What are the major subcategories of private equity and how do their investment approaches differ?

What are the advantages of setting up a private equity firm as an LLC$?$

What are the four major similarities for private equity transactions?

How might a GP be successful in raising a first$-$time fund without a track record?

Why would a corporation, like Salesforce, want to have a direct venture investing operation? Would that

rationale change for a consumer$-$focused company like Kellogg?

Which type of LP might be inclined to increase their private equity investment allocation going for$-$

ward? Why? Under what conditions might they want to decrease private equity exposure?

$64$ Chapter $2$ The Private Equity Cycle$-$Fundraising and Fund Choosing

What is the primary role of a FOF and what type of investor is likely to invest in one?

Why have FOFs received criticism?

In the limited partnership agreement, how are the interests of the LP and GP aligned?

Compare and contrast the traditional fund, which has a finite life, with the evergreen fund.

What is the purpose of a "concentration limit$"?$

How does the use of leverage vary among the different types of private equity firms?

Why have larger private equity firms $($in terms of assets under management$)$ come under scrutiny

regarding their management fee structure?

If a firm with a $$2$ billion fund charges a $2$ percent management fee for eight years, and $20$ percent

carried interest on all profits, and earns a $3\mathrm{.}0$ return on its investments, what is the true multiple of

investment and IRR for the LP$?($Assume that investments are made equally at the beginning of the

first through fifth years, the holding period of each investment is five years, and there are no transac$-$

tion fees$).$Venture capital, private equity, and the financing of entrepreneurship