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Entrepreneurial Finance & Venture Capital

Objectives

This course is designed for students who plan to get involved with new ventures - as founders, early employees, advisors or investors. Students will develop tools to evaluate investment and financing decisions in entrepreneurial settings.

General characterization

Code

2220

Credits

7

Responsible teacher

Francisco Queiró

Hours

Weekly - Available soon

Total - Available soon

Teaching language

English

Prerequisites

corporate finance. Compared with other finance courses, there will be less emphasis on learning new tools and more emphasis on applying the tools you have learned in corporate finance in contexts where information is limited and ambiguous, which is the norm with new ventures.

Bibliography

There will be no required textbook. Course materials will be posted for download on the course web page. For those who would like to read more about some of the topics covered in this course, here are a few references:

Andrew Metrick and Ayako Yasuda (2010). Venture Capital and the Finance of Innovation. Wiley.

Noam Wasserman (2013). The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup.

Constance Bagley and Craig Dauchy (2012). The Entrepreneur's Guide to Business Law, 4th Edition.

Smith, J., Smith, R. L., Smith, R., & Bliss, R. (2011). Entrepreneurial finance: strategy, valuation, and deal structure. Stanford University Press.

Brad Feld and Jason Mendelson (2011). Venture Deals: Be Smarter than your Lawyer and Venture Capitalist.

Teaching method

The course relies extensively on class discussion of case studies, and therefore requires substantial preparation in advance of each class. In order to encourage and reward discussion, class participation will be a key component of grading. In addition, you will be required to submit a 1-2 page memo of analysis and recommendations about each case before it is discussed in class. You may work in groups of up to four people on these memos. Case discussions will be supplemented with lectures, simulations, guest speakers and class exercises.

Evaluation method

?    Class participation: 25%
?    Case memos: 10%
?    Pitching contest: 5%
?    In class exercises (individual): 15%
?    Final exam: 45%


Subject matter

We will follow a startup’s path from founding through the stages of new venture finance. The course will be structured around three modules.

  • Identifying and evaluating opportunities:

    People, market, product, business model and context;

    Financial implications of business models;

    Valuation;

    Experimentation, real options and multistage finance;

  • Assessing financing alternatives:

    Deal structure and terms;

    Seed stage finance: search funds, angels, accelerators;

    Venture capital;

    Later stage financing;

  • Realizing returns:

    Selling the venture vs IPO vs staying private.