1. Texas Economics Association
Meet one another!
Please greet the people
around you!
Ask them what their
majors are, make “casual
conversation”
The meeting will begin shortly.

2. Texas Economics Association
General Meeting #2
Today’s speaker:
Mr. Brian Sandahl
Analyst

3. Sign-ups going around
• Adopt a Kiosk Community Service
• HS Tutoring Community Service
• Coed Volleyball IM Sports
• Committee Interest

4. What is the TEA?
• Social
• Philanthropic
• Professional
• Academic

5. What’s new this year?
Tutoring high school students
• Garza HS needs tutors
Economics Company Night
• Professional committee will lead
Research advising contacts
• Online research guide and professor network
• Dallas Federal Reserve Conference
Committees, leadership positions
• For your resume/sharing the load!

6. How to join?
Membership dues:
• $30/semester, $60/year – the YEAR option is with t-shirt
Active membership:
• 8 points throughout the year (meetings/event attendance)
Committee membership:
• Apply to individual officers, more info coming
Officer elections:
• Open to active members only
Join

7. Questions?

8. Ice Breakers!!

9. And now…
Mr. Brian Sandahl
Analyst

10. Texas Economics Association Meeting
September 15, 2010
Brian Sandahl
Analyst
Austin Ventures

11. Page 11
Agenda
– Private Equity Investing Overview
– Firm Overview
– Firm Structure
– A Career in Growth Equity Investing

12. Background
• BBA, May ’09
• Finance / Business Honors
• Minor: Spanish
• Orgs
• Freshman Business Association
• Undergraduate Business Council
• Work Experience
• Austin Capital Management
Page 12

13. Page 13
• Total Portfolio: Public Equity,
Fixed Income, Cash
• Alternative Investments
Hedge Funds, Private Equity, Real Estate
Strategies, Energy & Natural Resources,
Distressed Securities, Special Situations,
Emerging Markets
• Private Equity Leveraged Buyouts,
Secondary Funds, Growth Equity,
Mezzanine Capital, Venture Capital
• Venture Capital Seed/ Startup
Capital, Expansion Capital, Growth
Capital
Investment Asset Classes In
Perspective
Venture
Capital
Private Equity
Alternative Investments
Total Investment Portfolio

14. Page 14
An Overview of the Private Equity Industry
• VENTURE CAPITAL
– Early Stage
– Growth Stage
– Later Stage
• PRIVATE EQUITY INVESTING
– Growth Capital Firms
– LBO Firms

15. Page 15
Overall, Private Equity Fundraising Remained Strong
US Venture Capital Fundraising
(peak $104.3B)
US Buyout Fundraising
(peak $281.6B)
Source: Thomson Financial
$12
$18
$26
$33
$38
$52
$79
$72
$88
$78
$51$49
$79
$155
$200
$282
$252
$88
$54
$0
$50
$100
$150
$200
$250
$300
'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 1H
'10
(US$Billions)
$5 $4
$9 $10$12
$20
$30
$56
$104
$39
$9
$11
$20
$29
$32
$35
$28
$16
$8
$0
$20
$40
$60
$80
$100
$120
'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 1H
'10
(US$Billion)

16. Page 16
Austin Ventures Overview
• A venture capital and growth equity firm
• Over 25 years of venture capital/growth equity experience
– Growth equity businesses are more established, growing rapidly and can be modestly
leveraged to enhance returns
– Venture capital investments are riskier, but investors can strike out on 5 deals and hit 1 home
run and still provide a great return
– The combination of both investments in AV’s portfolio meets the needs of LPs wanting to
invest in both asset classes
– Allows AV to invest at every stage of the funding lifecycle, from initial seed investments,
through startup and growth capital, to management-led buyouts and recapitalizations
• $3.9 billion under management across 10 funds
• Invest nationally but maintain a particular focus on Texas, where we are the region’s
most active investor

17. Page 17
1984 1987 1991 1994 1997 1998 1999 2001 2005 2008
Austin Ventures Overview
Vintage
Fund I II III IV V VI VII VIII IX X
Cumulative Committed Capital
• 25+ years of venture
capital/private equity
investing
• Nationally-recognized,
regionally-dominant
• 325 investments and 81
active portfolio
companies
• 100 IPOs and
acquisitions
• 27 investment
professionals28M 88M
163M
278M
448M
768M
1.6B
2.9B
Annual Totals:
2.4B
3.9B
1984 1987 1991 1994 1997 1998 1999 2001 2005 2008
2008
2005
2001
1999
1998
1997
1994
1991
1987
1984
= $900M
= $525M
= $830M
= $825M
=$320M
=$170M
=$115M
=$75M
=$65M
=$28M

18. Page 18Page 18
Funding Every Stage of Innovation
Growth Equity Practice
• National investment sourcing effort
• Partnering with leading industry executives on high potential investment theses
• Focused on recurring revenue and asset-light business models
• Preference for the following industries:
— Supply Chain and Logistics
— Integrated Media
— Software
— Information, Financial, and Business Services
• Capital for acquisitions, growth, purchasing stock from owners, liquidity with leverage, management buyouts,
PIPEs and take privates
Venture Capital Practice
• Partnering with innovative entrepreneurs and founding teams
• Seed and Series A lead investor
• Leveraging extensive talent network of experienced executives
• Focused on: Internet; Enterprise and Infrastructure Software; Data Center / Com Systems; Alternative Energy,
and Semiconductors
• Capital for new product and service innovation

19. Page 19Page 19
Growth Equity: Providing “Flexible”
Capital and Structuring Alternatives
Founder /
Management
Buyout
Incubated Deals
Thematic
Rollups
Expansion
Capital
Take Private
Transactions
Example Deals What We Look For
Business attributes:
• Revenues: $20 to $100MM
• EBITDA: $5 to $15MM
• Demonstrated growth
• Recurring revenue
• Scalable business model
• Higher execution risk
• Lower market risk
• Founder led; not for sale
• Asset light
Opportunity for:
• $20 to $100MM equity commitment
• Conservative use of leverage

20. Page 20Page 20
Venture: Partnering with Visionaries to
Build Category-Defining CompaniesRecent Deals What We Look For
Target characteristics:
• Proven entrepreneurs with deep domain
experience
Transaction / Company Size:
• Seed and Series A
• Growth capital
Investment Size:
• $100k-$10MM
Industries:
• Business Services & Supply Chain
• Financial Services
• New Media, Internet, & Information
Services
• Software
• Texas Special Situations
Lo
Software
New Media
Financial
Services
Business
Services

21. Page 21
What Service Do We Provide?
Limited
Partners
(“LPs”)
Our Customers
AV raises $ from LPs
AV
Portfolio
Company
AV invests $ on behalf of LPs in
private or public companies
LP $
LP $ and AV
Partner $
AV identifies, executes and manages investments in companies and seeks to exit the investment at a profit– our
ability to profitably exit in turn affects our ability to attract more money from LPs

22. Page 22
How AV Makes Money
$900
Million
AV Fund X
Management Fee Carried Interest
% %
• A fixed % of fund assets
• Used to pay salaries, bonuses,
rent, utilities and deal related
expenses
• % of Profits
• This is where the real money is
made

23. Page 23
Exit
Portfolio
Company
Exit Strategy
IPO
Leveraged Recap
Sale
Wind Down
Sell a portion of AV’s
ownership through a public
offering of stock
Put more debt on the company
and take a dividend
Sell the company in its entirety
to either a strategic or financial
buyer
Stop funding the company and
eventually close the operations
Return of Capital
AV
LPs

24. Page 24
A Career in Growth Equity Investing
I-Banking Consulting Public Accting
Exit Opps
Experience
Competition
Commitment
Private Equity
Hedge Funds
Corporate Development
Graduate Business School
Highly
Competitive
Top Accounting
Majors
2 – 3 years 2 – 3 years Various
Highly
Competitive
Valuation, M&A,
Capital Raising
Business Strategy,
Operations
Auditing, Financial
Statement Analysis
Popular Career Choices Post-Graduation

25. Page 25
A Career in Growth Equity Investing
• Constant learning curve
• Relatively few job openings
• Competition among “the best of the best”
• Investment banking and consulting are the closest analogs
• You touch every aspect of company creation, growth and value
maximization
• Strategy consulting; transactional / investment banking; operational involvement;
team building; recruiting
• Unlike other types of investing, you can influence the outcome
• Regardless of AV’s ownership % in a specific investment, you are in the
“power of persuasion” business
• Be patient: very long term business with lots of uncertainty

26. Page 26
Next Steps: Positioning Yourself for a
Job in Private Equity
• Do your homework (READ, talk to people, self-reflect) and decide what your short-term career goals are
• Have a diverse array of experiences through internships to see what fits you best; work hard and maximize your experiences
• Challenge yourself to get the most out of school; don’t be afraid of tough classes
• Pursue “tried and true” investment banking analyst program (preferably bulge bracket bank with M&A exposure) or
management consulting at top firm (McKinsey, Bain, BCG)
– Investment banking is the easiest path to a job in private equity due to the analytical / modeling foundation
– Consulting is a solid path due to its strategic emphasis
– If you pursue a career outside these two fields, getting into private equity will be more challenging because you will
not be a “known quantity”
• What are we looking for?
– Excellent academic record (BHP and/or MPA with high GPA and A’s in accounting classes) and high standardized test
scores
– Strong professional experience in investment banking or consulting
– A demonstrated hard work ethic, proven extracurricular leadership and involvement in activities outside of school
– Someone with a clear idea of (1) why he/she wants to pursue growth equity investing and (2) why a position at AV
would be right for him/her
– A general knowledge of how private equity investing works
– Strong fundamental understanding of financial accounting and a track record of success in Intro, Intermediate and
Financial Statement Analysis courses
– A curious mind with a knack for problem solving and comfort dealing with ambiguity
– A fun person who has a good attitude, is easy to work with and good to be around in social, non-work settings
– Broad interests and a passion for learning in fields beyond just finance and accounting
• Questions ???

27. Thank you!