Английский язык. Практический курс для решения бизнес-задач

The dotcom boom

Due almost entirely to the dotcom boom, the late 1990s were a boom time for the globally-renowned VC firms on Sand Hill Road in San Francisco. IPOs were taking truly irrational leaps, and access to «friends and family» shares was becoming a major determiner of who would benefit from any such IPO; the ordinary investor rarely got a chance to invest at the strike price in this period.

The NASDAQ crash and technology slump that started in March 2000, and the resulting catastrophic losses on overvalued, non-performing startrups, shook VC funds deeply. By 2003, many VCs were focused on writing off companies they funded just a few years earlier, and many funds were «under water»; that is, their portfolio companies were worth less than when invested in. Venture capital investors sought to reduce the large commitments they have made to venture capital funds. As of mid-2003, the conventional wisdom was that the venture capital industry would shrink to about half its present capacity in the following few years. However, Pricewaterhouse Coopers’ MoneyTree Survey shows total venture capital investments holding steady at 2003 levels through Q2 2005. The renaissance of an Internet-driven business (thanks to deals such as eBay’s purchase of Skype, the News Corporation’s purchase of MySpace, and the very successful Google IPO) has helped to revive the VC environment.

Source: Wikipedia

Essential Vocabulary

1.venture capital (VC) – венчурный (рисковый) капитал

venture capitalist – венчурный капиталист

2. capital market – рынок капитала

3. bank loan – банковский заем

4. collateral (collat) n – обеспечение

5. initial public offering (IPO) – первоначальное публичное предложение акций

6. entrepreneur-in-residence (EIR) – «домашний» предприниматель

7. due diligence – процесс должной проверки

8. Chief Technology Officer (CTO) – главный технический директор

9. fixed-lifetime fund – фонд с фиксированным сроком действия

10. pioneer n – первопроходец

pioneer v – прокладывать путь, вести

11. ascendance n – власть, доминирующее положение

12. preferred stock – привилегированные акции

13. convertible (convertibles) debt instruments (bonds) – конвертируемые долговые инструменты (облигации)

14.common stock – обыкновенные акции

15. buyout n – выкуп

buy out v – выкупать

16. rule of thumb – эмпирическое правило, практический метод

17. warrant (WT) n – варрант

18. harvest n – урожай, уборка урожая

harvesting n – уборка урожая

harvest v – собирать урожай

19. write off n – списание

write off v – списывать

20. mitigation n – смягчение, уменьшение

mitigate v – смягчать, уменьшать

21. fledgling company – только что созданная компания

22. annualizing n – пересчет в годовое исчисление

annualize v – пересчитывать на годовой основе

annualized a – пересчитанный на годовой основе

23. passage n – зд. прохождение, принятие (закона)

pass v – принимать (закон)

24. Small Business Administration (SBA) – Администрация по делам малого бизнеса (США)

25. Small Business Investment Company (SBIC) – инвестиционная компания для малого бизнеса (США)

26. Federal Reserve Board (FRB) – Совет управляющих ФРС (США)

27. merchant bank – торговый банк (Великобритания, сходен с инвестиционным банком по функциям)

28. boom n – бум, быстрый экономический подъем, период экономического процветания

boom v – быстро расти, процветать (об экономике)

29. strike price – цена исполнения

30. National Association of Securities Dealers Automated Quotations (NASDAQ) – Автоматизированные котировки Национальной ассоциации дилеров по ценным бумагам (НАСДАК)

31. slump n – краткосрочное падение экономической активности или цены конкретной ценной бумаги

slump v – снижаться, падать (об экономической активности или цене ценной бумаги)

Exercise 1. Answer the following questions.

1. What are the main differences between venture capital and the traditional financing? 2. Who are the partners of venture capitalists? 3. What are the characteristic features of fixed-lifetime funds? 4. What are the usual forms of a VC investment? 5. Is venture capital suitable for many entrepreneurs? 6. What is the usual proportion between successes and failures in the VC industry? 7. How can venture capitalists mitigate the risk of failure? 8. How was the VC industry launched? 9. How did the Small Business Investment Act of 1958 promote the VC industry? 10. Why has venture capitalism developed more actively in the US than elsewhere in the world? 11. What was the contribution of the dotcom boom to the development of the VC industry? 12. What were the effects of NASDAQ crash and technological slump? 13. How is the VC industry developing worldwide?

Exercise 2*. In general, businesses set up through venture financing develop by stages described below. Match the names of these stages given under the leading «Venture Financing Terms» with their definitions given below and describe evolution of a fledgling company through these stages.

Stages of Development of a Business

1. source of funding for the early stages of a startup venture where the product, process, or service is in its conceptual or developmental phase

2. from founding the business to the beginning of operations and the generation of revenue

3. initial growth phase, funded by the initial capitalization. Management and operations are in place, and markets initially identified are being penetrated using available resources

4. the business seeks to expand its product line, expand its facilities, identify and penetrate new markets, and continue the growth phase

5. the business is established in its target markets

6. financing provided, usually by private investors or venture capital firms, prior to a company going public, or initiating its next stage of financing