Venture Capital and Private Equity Management

Start with who needs analysis and support for investment in young and established firms and why. Around investment teams and founders drive demand in Dubai, Abu Dhabi and the other emirates.

• List 10 offers or suppliers in the UAE with price per deal in AED and who buys.
• Interview 5 people from investment teams and founders: what do they buy now, how often, what do they pay, what annoys them?
• Learn three terms: Due diligence (checking the facts behind a deal); Term sheet (a short list of the main deal terms); Portfolio review (a regular look at all investments).
• Write a one-page brief: user, need, hoped-for price, and the rule that matters most.

Activity. Complete the market table, five interview notes and the brief.

Standard to meet. Price ten offers, interview five users, and state one need in one sentence.

Know the rule before the work. Main hazards here: conflicts of interest and overstated returns. Hazard thinking means list each step, ask what could go wrong, and decide the control.

• Ask your local authority or free zone which licence, permit or inspection applies. Write the answer and the date you asked.
• For each step (source deals; screen; check facts; structure; support and report) write the hazard and the control.
• Use a hierarchy: remove the hazard, replace it, separate people from it, change the way of work, then protective equipment last.
• Keep a one-page incident rule: who you call, what you stop, what you record.

Activity. Draw the flow and mark hazard and control at each step.

Standard to meet. Name a hazard and a control for every step, and answer the licence question in writing.

The work is a short chain: source deals, screen, check facts, structure, support and report. Learn each link, then link them with records.

• Write a checklist for each of the 5 steps: input, action, check, output.
• Time each step three times and note the slowest.
• Record a defect or delay each time it happens: what, where, cause, fix.
• Measure deals screened per deal funded; this is your main number.

Activity. Run the chain three times (simulated or real) and fill the log.

Standard to meet. Complete three logs, and give the slowest step a cause and a fix.

What you do not measure you cannot improve. Your main measure is deals screened per deal funded.

• Define deals screened per deal funded: what counts, what does not, and over what period.
• Draw a simple chart of the last 10 results and mark the average.
• Find the top two causes of loss with a tally sheet, then fix the biggest one first.
• Check measuring tools: are they accurate, clean and in date?

Activity. Collect a tally for one week and make a Pareto chart.

Standard to meet. Complete the tally, name the biggest cause, and plan one fix with a date.

Know the cost of one deal before you set the price. Include materials, labour, energy, transport, licence share, waste and a safety margin.

• Cost per deal = total cost divided by deals sold (not made).
• Margin = (price minus cost) divided by price.
• Break-even units = fixed costs divided by gain per unit.
• Test the price with two users and write down the answer.

Activity. Build the cost sheet with AED on every line and have your mentor check it.

Standard to meet. Check that no cost is missing, and calculate the margin twice by different routes.

Customers return when you keep promises. Promise only what your workflow can deliver.

• Write a one-page offer: what is included, what is not, price, time, how you fix mistakes.
• Write a short script for the first call or visit.
• Agree dates in writing; confirm each change.
• Handle a complaint in four steps: listen, apologise for the impact, fix, record what changed.

Activity. Present the offer to two users and note changes.

Standard to meet. Write an offer with scope, price, time and a fix rule, and collect comments from two users.

Small, real and recorded. Change one thing at a time and learn quickly.

• Keep a daily log: date, units, cost, delays, defects, safety notes.
• Hold a 15-minute review each week with your mentor.
• Write down every complaint and what you changed.
• Take photos only where allowed and never of people without consent.

Activity. Complete 30 days of the log and four weekly reviews.

Standard to meet. Log 30 days, give each defect a cause, and keep weekly notes.

A decision beats a feeling. Compare plan with result and choose to scale, change or stop.

• Make a before and after table: cost per unit, defects, delays, repeat users.
• Write three lessons.
• Decide scale, change or stop, with the numbers behind it.
• Give two peers one strength and one fix each.

Activity. Present to a review room and collect one written comment from a user.

Standard to meet. Justify the decision with numbers, and give two peer reviews.

Every investment deal comes down to a few numbers: what the firm is worth before money arrives, how much is put in, and what share that buys.

• Pre-money value is the worth of the firm before new money. Post-money value = pre-money value + the new investment.
• The new investor's share = investment / post-money value. Existing owners are diluted by the same proportion.
• A term sheet lists the main terms: amount, valuation, share type, board seats and rights if things go badly. It is a summary, not the final contract.
• Investments can lose all their value. Always show the downside case next to any upside case, and never state returns as certain.

Activity. Calculate ownership before and after a round for three sample deals and show the downside case for each.

Standard to meet. Show pre- and post-money, check that shares add to 100%, and write a downside case for every deal.

Checking the facts behind a deal protects the money of other people. So does declaring any personal interest early.

• Due diligence covers four areas: financial records, legal ownership and contracts, customers and market, and the people running the firm.
• Ask for evidence, not claims: bank statements, signed contracts, tax filings and licences.
• Declare conflicts of interest in writing, such as a relative or an existing stake in a rival, before a deal is discussed.
• Report performance fairly: show losses as well as gains, and never promise or imply future returns. Only licensed professionals give investment advice.

Activity. Prepare a due diligence checklist of at least 12 evidence items for a sample firm and mark which are missing.

Standard to meet. Name the evidence document for each item, measure the gaps, and complete the conflict declaration form.

A team sees many more deals than it can fund. Simple counts show where the process is working and where it leaks.

• Set screening rules before looking at deals: sector, stage, size of investment and minimum evidence.
• Track the funnel: deals received, passed first screen, reached diligence, funded.
• In a portfolio review, mark each holding as on plan, watch or at risk, with a reason and a next step.
• Remember a few investments often lose money; judge the whole portfolio and the quality of decisions, not one result.

Activity. Build a funnel table from sample figures and write a one-line review note for each of 6 sample holdings.

Standard to meet. Calculate percentages correct to one decimal place, give every holding a status, reason and next step, and promise no return.

On the slide: L1 Basic · Venture capital and private equity

Notes: Name what an investor, a founder and a term sheet are and say that investments can lose value. Notes: use a small start-up story; state that no returns are promised and that only licensed professionals advise.

On the slide: L2 Awareness · Conflicts and honest reporting

Notes: Explain why a conflict of interest is declared in writing before a deal and why losses are reported as well as gains. Notes: examples are a relative or an existing stake in a rival; learners mark which statements promise returns and so are not allowed.

On the slide: L3 Foundation · Work out ownership after a round

Notes: Calculate post-money value and the investor share for a sample deal. Notes: check the practice case of AED 8,000,000 before money plus AED 2,000,000 gives AED 10,000,000 and 20.0%, leaving a founder with 80.0%; always add a downside case.

On the slide: L4 Practitioner · Build a due diligence checklist

Notes: Prepare a checklist of at least 12 evidence items for a sample firm and mark what is missing. Notes: ask for bank statements, contracts, tax filings and licences; a claim of AED 5,000,000 against deposits of AED 3,900,000 is a gap of 22.0%, so the deal pauses.

On the slide: L5 Specialist · Read the funnel and decide

Notes: Analyse a funnel table and decide where the process leaks. Notes: 240 deals, 60 screened in, 15 in diligence and 5 funded gives 25.0%, 33.3% and 48 deals screened per deal funded; price check is AED 30,000 per deal against AED 12,000 cost, a margin of 60.0%.

On the slide: L6 Advanced · Coach analysts on screening rules

Notes: Set screening rules before deals are seen, a conflict form and a monthly portfolio review for a small team. Notes: mark every holding on plan, watch or at risk with a reason and next step; sample five screening notes a month for evidence named and no returns promised.

On the slide: L7 Super expert · Design the whole investment process

Notes: Design the sourcing, screening, diligence, conflict and reporting controls for a team, audit return and conflict risks and write a 12-month plan. Notes: plan for 6 deals a month; present one risk, one saving and a target for deals screened per deal funded.