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VENTURE CAPITAL ADAMS CAPITAL MANAGEMENT FUND IV

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1) I believe that ACM should start raising their fund IV now, since the markets are just stabilising and there is a discontinuity in investments for the past 5 years. By raising a fund, ACM will be able to capture the upcoming businesses and stay true to their first into markets strategy.

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Even though the firm has not been able to make frequent distributions from the fund, its is clearly seen that the fund is performing pretty well. The portfolio for fund 3, looks promising as all the companies seem to be in a good position to either enter an IPO or a M&A. Therefore, the firm can use their track record and their discontinuity strategy to raise another fund. With the firms policy of having, two partners per deal, the investment will always be in control and hence reduce risks.

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Also, they should position their fund as a long term fund which will hold higher stakes in fewer companies and concentrate and help these companies grow into better ones and then find an exit rather than going for a home run. The fund would be one which would concentrate on the present discontinuities in the market and so this would be a right time to invest.

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The fund should be one that focusses not only on companies in early stages of the industry but also companies that have a newer and unfamiliar business idea. Since, the IT, semiconductor and networking infrastructure companies were already funded and many in number, the chances of more success would be limited and hence this fund should shift

The firm to strike a balance and ensure that the implementation and execution are precise and don’t harm the existing portfolio. ! 2) ACM should definitely expand into life sciences. ! These changes will require that the firm invest a lot of time and money into the process and it might slow down the pace of investments and quality of monitoring in the already existing investments. the reason being that there are huge opportunities in this field. in my opinion has to make the following amendments to reap the benefits of this discontinuity: • Firstly. like that of dell. Sweekruthi Kaveripatnam A0119990U . it should be left to the “life guys” to make a decision on the firms they would want to invest in but the existing GP’s could advise them on the terms of the investment. ! The firm. has their key strength thus far has been its general partners who have been knowledgable in the field and have been able to make decisions that aren't swayed by the emotions of the entrepreneurs. But I consider it a worthwhile investment to reap future profits. • Secondly. There are so many discontinuities in this industry and the changing trend means there are high probabilities of market changing business ideas.focus to another industry. which will also diversify the portfolio of existing LP’s and give them a chance to reap benefits of a newer industry. the firm has to gather expertise in this area. the already existing GP’s should be playing a different role in the investments to be made in life sciences. Expanding into a new industry will give the firm more chances of making profits and also portray it a firm hungry for growth and change. As in.