Entrepreneurial Finance and Private Equity

Class #3 – Wednesday, October 23, 2002

International Fund Raising

Case: JAFCO American Ventures, Inc: Building a Venture Capital Firm

Optional Reading: “Distribution Management”, Credit Suisse Asset Management, First Quarter 2002. This article provides updated information on portfolio benchmarks. It is available on the class website, PVCI.pdf.

Network File: JAFCO.xls

This case describes the second attempt at entry of JAFCO, a large Japanese venture capital firm, into the U.S. market. The U.S. subsidiary, JAFCO American Ventures (JAV), is experiencing a challenging turnaround.

1. What is your assessment of JAV’s performance to date? What is your assessment of JAV’s USITI fund performance to date?

2. What are JAV’s Challenges over the next five years?

3. Would you advise Barry Schiffman and his colleagues to move into seed stage investing? Should they move into life sciences?

4. How can JAFCO learn from JAV?

5. How should JAFCO change its incentive system, it at all?