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REMINDER!
A how-to guide:
think like a businessperson, but act like a lawyer.
Securities
Private Funds:
PE / VC
Public / Capital
Markets
M&A
Tax
Secured
Transactions
Bankruptcy /
Restructuring
Debt /
Recaps
Real Estate
Private Entities
Contracting
Regulatory
IP
Corporate Infrastructure
Corporation / Company Departments:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
HR
CEO
COO
Legal
Accounting
Marketing
OCR
CFO
Sales
Finance
Supply Chain
Recruiting
IT
Production
R&D
Admin
Strategy / Big Data / Analytics
Facilities
Ops
5
Corporate Organization
C-suite
Operations
Sales &
Marketing
Strategy /
NPD
Finance /
M&A
IT
HR
Supply Chain
Sales Contracts
New
products /
offerings
Public:
securities
IP
Employee
Marketing
Agencies
R&D / IP
Debt / Recaps
Vendors
Keyman liability
protections
goods or services
Ads /
Sponsorships
M&A
Legal /
Compliance
Supports all areas
and hires law firms
Corporate Structure
Types of corporate entities:
1.
2.
3.
4.
5.
6.
7.
8.
9.
S-Corp
LLC
C-Corp
LLP
GP
LP
Sole proprietorship
LLLP
PLLC
GP / LP
C-Corp
LLC
Other (sole,
LLP, LLLP,
PLLC, S-Corp)
Usage
PE / VC fund
structures; Professional
services groups
Public Co.s;
Larger privately held
Co.s
Rarer usage
Set-up
Easy to form
GP = mgmt. entity
Medium effort
Capital
Must be LP to be
investing
More difficult;
distribution allocation is
variable; membership
interests, not stock
Liability
GP has unlimited
liability; LP has limited
Least liability;
Independent entity
Limited
Pass-through (can
Taxes
Pass-through
Double-tax
choose tax structure
Note: this does not contemplate all legal implications of each entity this isdefault
more ofisa partnership)
business overview
10
PE
What is it?
How does it work?
1.
2.
3.
11
In our society, typically refers to PE Firms = firms that pool capital from private or
institutional investors to make investments in established companies via a leveraged
buy out (LBO) model
Private investors = family offices, high net worth individuals (were talking
hundreds of millions to billions here); must qualify with the SEC
Institutional investors = retirement / pension funds
Ex: one of the largest is CalPERS = Cali Public Employees Retirement
System has $300B invested - $44B exposure in PE
PE Firms usually have investing theses = the types of industries preferred (verticals)
to invest their capital
Ex: biotech, healthcare services, manufacturing, pharma, etc.
12
13
14
15
Fund
Mgmt.
Fund
Parent Co
GP, LLC
Fund Mgmt
Co, LP
Fund UGP,
LLC
Fund GP,
LP
Fund
Mgmt.
Institutional
$$
Private
$$
THE FUND, LP
PortCo A, LLC
PortCo B, LLC
PortCo C,
C-Corp
16
PortCo B
acquisition
PortCo A
sale
PortCo B
sale
PortCo A
acquisition
Investor
C
Fund
close
Fund Formation
and capital
commitments
PortCo C
sale
Years
#1 - 4
Capital calls for
PortCo acquisitions
Years
#4 - 10
PortCo sales /
exits
Fund
wind-down