Files You would Get:
Word (.docx) & Excel (.xlsx)
Question Covered in this Solution:
1. would you recommend that Accel Europe make its first investment in Cape
Clear? Your answer should have a qualitative and quantitative component.
2. Assume that O Riordain decides he wants to invest and that Greylock does
not invest with Accel. The term sheet should include: A. Pre-money Value,
B.Investment amount from Accel C. Additional option pool for management.
Explain and justify your terms. What IRR and MOIC do you expect it to
provide? Will Cape Clear accept it?
3. Assume that Greylock decides to invest with Accel. Would your answer to
question 2 above change? Base on your answer, would you recommend inviting
Greylock to invest in the deal?
4. If you were an institutional investor in private equity, would you
invest in Accel’s European Fund? Why or Why not?
(Assumptions: 1. The long-term Treasury Bond rate in Euros is 4.78% 2.
Long run inflation is 2%)
Sample of Solution
- Would you recommend that Accel Europe makes its first investment in Cape Clear? Your answer should have a qualitative and quantitative component.
Accel Europe has its parent firm, in the California United States, with its limited functionality in Europe. Whereas, Cape Clear in an Irish based European software firm, which is looking for the competent, experienced venture capitalists firm, who can not only provide the required investments for their potential products but also guide and mentor Cape through the progression of its operations. Cape Clear, has shown preference to partner with some U.S based venture capitalists, as it was still believed that European V.C would be less component as that of U.S.
Additional Option Pool:
- If you were an institutional investor in private equity, would you invest in Accel’s European Fund? Why or Why not?
It would be recommended for an institutional investor in private equity, to invest in the Accel’s European Fund. Since the fund is managed by the competent management which has diversified expertise in both the United States and European markets, they would be more effective in realizing diversified deals.