Brion Applegate and Bill Collatos had already started a fund-raising campaign for their new venture-capital fund when the principals of a prestigious Wall Street investment bank asked them to become the two senior partners of an in-house $150 million fund. The case analyzes: (1) the venture capital investing process, (2) the experience, networks, and timing of starting a specialized fund, (3) the written prospectus of the new fund, and (4) the decisions and issues confronting Applegate and Collatos.

Spreadsheet Supplement for case 295021.

Many built-in problems and risks await the entrepreneur who is searching for capital. Being aware of the realities can help - realities like that raising money costs a lot. The process also drains managers' time and energy, which can make the business suffer. Delegating the capital search by hiring advisers to do the negotiating can also backfire if you don't choose the right adviser - one that will tailor the search to your needs.