Английский язык. Практический курс для решения бизнес-задач - Нина Пусенкова

Venture Financing Terms:

Private Placement. Feasibility Study. Seed Capital. Mezzanine Financing.

Sweat Equity. Startup. First Stage. Dilution. Second Stage. Equity Stake.

Third Stage. Due Diligence.

Exercise 3*. Which of the following statements are not correct and why?

1. A venture capital fund is a pooled investment vehicle that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans. 2. Venture financing is mainly provided to mature enterprises that have sufficient collateral, good track record, or stable earnings. 3. Venture capitalists typically expect a 5-15% annual return on their investment at the time they are bought out. 4. Investors in venture capital funds are typically large institutions with huge amounts of available capital. 5. Venture capitalists are not very selective in deciding what to invest in; a fund invests in about one in twenty opportunities presented to it. 6. Most venture funding goes into oil and gas sector or service companies. 7. The success rate of investments is high; anywhere from 50% to 70% of the funded enterprises return the invested capital. 8. The first venture-backed startup is generally considered to be Fairchild Semiconductor, funded in 1959 by Venrock Associates. 9. Venture capital is a phenomenon most closely associated with Japan and car making companies. 10. The NASDAQ crash and technology slump that started in March 2000 shook VC funds deeply. 11. The renaissance of an Internet-driven business has helped to revive the VC environment.

Exercise 4*. Fill in the blanks using terms given below.

Silicon Valley

Silicon Valley is an area of Northern California between the cities of San Francisco and San Jose. Until the middle of the 20th century, this….. region was better known for its apricots and walnuts than for its….. A combination of regional…… and historical accidents conspired to produce one of the greatest……. in the world.

Many people have……. the success of the Valley primarily to the influence of nearby………, particularly Stanford University. In the 1920’s, administrators at Stanford sought to improve the prestige of their institution by….. highly respected…… members from East Coast universities. One important…… was Fred Terman, an electrical engineer from MIT. Like many of his colleagues, he performed……. research in electronics. Unlike many others, though, he encouraged his students to sell….. of these new technologies in the…….. By providing……. and……, Terman enabled two of his first recruits, David Hewlett and William Packard, to…… the audio-oscillator in the late 1930s.

In 1954, Stanford University offered to….. part of Stanford Research Park to……. companies. This began the…….. of industries in Palo Alto. Stanford Research Park, through the……. of a few influential professors and university administrators, became the……. of the budding Silicon Valley. By the 1980s, the entire park had been rented out to…… firms.

The 1950s also witnessed the birth of the…….. industry. Dr. William Shockley, a Cal Tech trained engineer……. electronics by developing the transistor to magnify electronic images and replace vacuum tubes. He and some talented young……. from the East Coast……. Shockley Industries in Palo Alto. Unfortunately, his stubbornness and lack of tact soon alienated many of his colleagues and caused them to…… from his firm and form their own company, Fairchild Semiconductor. It became the first firm to……. exclusively in silicon and rapidly…….. into one of the leaders in the California electronics industry.

Over the next few years this……. would repeat itself several times, as engineers lost control of the companies they started to……. management, and then left to form new companies. AMD, Signetics, National Semiconductor and Intel all started as…… from Fairchild.

The role of……. in the development of Silicon Valley can not be……. The……. of a major military……… Lockheed, to California in 1956 brought federal……. dollars to the area. Semiconductors…….. by the defense agencies amounted to approximately two-fifths of total production. The presence of major research universities and the concentration of……. workers was also an important consideration.

This rapid……. of technology reflects itself in the organization of Silicon Valley as the new technological…….. The people who……. or were employed in these new firms considered themselves as technological…….. and the formal and informal…… that they developed are in some ways akin to the pioneers who settled the West in the 19th century. As modern-day pioneers, they were especially responsive to risky……. that had the potential for great…….

Along with sharing the same type of risks, the…….. also shared a camaraderie unsurpassed almost anywhere else in American industry. Even engineers and scientists who work at……… firms during the workday remained close friends off the job. The manager of one semiconductor firm would not hesitate to call a……. for assistance on technical matters.

The lack of rigid…….. extended to the firms themselves. Beginning with Hewlett and Packard, many of the Silicon Valley companies sought a much more interactive environment between employers and employees…….. of powers followed: major divisions of firms were given a large amount of……..

By the early 1970s there were many….. companies in the area. The growth was fueled by the emergence of the……. industry, beginning with Kleiner Perkins in 1972; the industry exploded after the successful $1.3 billion….. of Apple Computer in December 1980.

Source: Wikepedia

Terms:

frontier, offshoots, marketplace, fledgling, relocation, VC, hiring, contractor, revolutionized, core, equipment, semiconductor, procurement, rewards, entrepreneurs, agricultural, faculty, scholars, hi-tech, defense, Apples, underestimated, advantages, IPO, trailblazers, hierarchies, «science parks», attributed, autonomy, institutions of higher education, recruit, cutting-edge, applications, funds, rent, agglomeration, rival, efforts, start up, founded, resign, developed, pattern, government, highly qualified, rise, launched, communities, ventures, competing, manufacture, decentralization, outside, commercialize

Exercise 5. Translate into English.

Венчурный капитал в России

В России венчурный капитал пока только зарождается, однако потенциально является одним из основных источников финансирования для коммерциализации научно-технических разработок. Финансовый кризис 1998 г., с одной стороны, существенно ослабил финансовую систему России, но, с другой стороны, создал предпосылки для переориентации финансовых ресурсов на реальный сектор экономики. По мнению участников инновационного бизнеса, уже есть сигналы того, что российский торговый, банковский, страховой капитал, капитал пенсионных фондов будет становиться серьезным источником инвестиций в инновационные проекты малых фирм. Разумеется, для успешного развития венчурного капитала в России требуется комплекс мер государственной политики. В настоящее время уже воплощается в жизнь ряд проектов, направленных на развитие венчурного финансирования. Следует отметить, во-первых, работу государственного Фонда содействия развитию малых форм предприятий в научно-технической сфере, возглавляемого И.М. Бортником. Этот фонд предоставляет финансовую поддержку малым инновационным фирмам на возвратной основе.

Во-вторых, с сентября 1997 г. реализуется пилотная программа Европейской ассоциации венчурного капитала по поддержке развития венчурного капитала в странах бывшего СССР (NIS Venture Capital Support Program). Данный проект финансируется Программой ТАСИС Европейского союза. Программа сфокусирована на РФ, Украине и Казахстане и реализует следующие цели:

– провести тренинговые курсы по венчурному финансированию;

– составить и опубликовать справочник по частным компаниям, специализирующимся на инвестициях в акционерный капитал в странах СНГ;

– обеспечить поддержку и возможности для взаимодействия ассоциациям венчурного капитала.

Проект также направлен на рост осведомленности о значимости венчурного капитала как средства финансирования малых и средних предприятий, что должно быть достигнуто благодаря проведению национальных и региональных встреч и семинаров.

В-третьих, на территории России действуют региональные фонды венчурного капитала (РФВК) Европейского банка реконструкции и развития (ЕБРР). Каждый РФВК располагает капиталом в размере $ 30 млн для инвестирования в качестве нового акционерного капитала в средние приватизированные и другие частные предприятия на цели финансирования проектов, которые, как предполагается, должны принести коммерческий доход. Инвестируя средства в акционерный капитал, РФВК подходят к инвестиционным перспективам со среднесрочных позиций. Минимальный размер инвестиции составляет $ 300 тыс., а максимальный – $ 3 млн.

Источник: www.techbusiness.ru (отрывок)

Lesson 20

Global M&As

Read and translate the text and learn terms from the Essential Vocabulary.

Extinction of the Predator

How Merger Mania Has Been a Disaster for the World’s Great Car Manufacturers

The star of the huge Frankfurt Motor show in 2005 may well be the luxury Mercedes-Benz s-class, the model on which the German company is relying to repair its faded reputation for superior quality. But the more significant event will be the presence for the first time of three different vehicles made in China and destined for export.

Today’s controversies over high petrol prices and fuel consuming cars in the huge US market offer only a partial picture of the future facing the auto industry. It may well be fully mature in North America, Europe and Japan, where over-capacity continues to undermine profitability. But globally the industry is set for huge expansion with the motorization of China and India. Within a few years China will replace Japan as the second-largest national market after America. Some experts predict that over the next 20 years more cars will be made than in the entire 110-year history of the industry.

Garel Rhys from Cardiff University says this growth will create the need for 180 new factories, each producing 300,000 cars a year – almost doubling the production capacity of the global industry to over 110 million units annually. Today’s car plants, he says, will need to be «renewed, retooled, refurbished and replaced to remain competitive. There is nowhere for the inefficient to hide.»

That is a bleak message for today’s established producers, many of which have merged their way to giant status, but suffer from legacy costs and operating problems and could now be beaten by new entrants and competitors that did not play the merger game. The question is: which of today’s big carmakers will be hurt the most? The question could be an even tougher one: which will survive?

Other industries subjected to similar waves of new competition have seen dramatic shake-ups and the disappearance of famous names – personal computers offer a good example. Some observers predict just that: famous carmakers will own the technology and brands, while manufacture and distribution will be contracted out. (This already happens with a few low-volume cars, such as the Porsche Boxster).

Consolidation in the car industry has been going on since its earliest days when 200 garage-sized firms were bundled into GM. By the middle of the 20th century famous names such as Studebaker and American Motors were closing down or being acquired by stronger companies, leaving the industry in the hands of GM, Ford and Chrysler.

Consolidation in cars is not as starkly obvious to the consumer as it has been in, say, PCs. Many brands still remain, as mergers and alliances between firms have simply bundled, rather than destroyed, them. No fewer than 58 brands survive among the ten largest manufacturers. In fact, if their affiliates as well as their wholly-owned subsidiaries are counted, the top five company alliances account for 75% of the global market, while adding the next five takes this to 90%, with producers in China, India and Malaysia making up the rest.

The strategy of consolidating behind the brands has not been entirely successful: there is an inverse correlation between the number of brands a firm possesses and profitability. GM is still the big beast of the industry, but it is no longer in any shape to acquire others. It has twice the number of brands of its closest competitor, Ford, but it is second to last in the profitability league. Toyota, the industry’s profitability champion, has only four brands and a handful of models, but a huge range of variants on them.

The industry has experienced a 20-year splurge that has seen GM swallow Saab and Daewoo, while signing up Isuzu, Subaru and Suzuki in Japan. Since 1989, Ford, the next biggest brand-acquirer, has taken over Jaguar, Aston Martin, Land Rover and Volvo. But it, like GM, has done more spending than getting. Jaguar still bleeds cash after an investment topping $5 billion and Volvo until recently has been in the red. None of this has done anything for the company’s profitability, leaving it just above GM and weak Fiat.