Entrepreneurial Finance & Venture Capital

General characterization

Prerequisites

n/a 

Bibliography

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

Kerr , William; Nanda , Ramana and McQuade , James, Entrepreneurship Reading: Financing Entrepreneurial Ventures, Harvard (8072-HTM-ENG), 2014.

Bussgang , Jeffrey and Roberts , Michael Entrepreneurship Reading: Partnering with Venture Capitalists, Harvard (8240-HTM-ENG), 2014 

Teaching method

This course uses a combination of formal lectures and case-study discussions, with an emphasis on the latter. All students enrolled will form groups of 5 members. All groups are required to submit 4 written case reports. Graders will allocate groups to cases in order to guarantee a sufficient number of written reports for each case. Students should be ready to share their analyses in class presentations and to actively participate in all class discussions, regardless of having been allocated (or not) a particular case for written report. Case-studies identified on the syllabus for discussion will be used for assignment (although each group is limited to four written reports) and will be discussed in class. All students are assumed to have read and analysed all case-studies and to be ready to publicly present their conclusions and answer any questions posed by the instructor on them. Cold calls will be used. Sometimes, cases will be used as a basis for role playing by different groups of students of real-life simulated events. More than one group may be involved in class presentations. Additionally, students will participate, on an individual basis, on a simulation covering entrepreneurial finance issues. 

When cases are assigned to groups, one of the student groups who prepared the written report will be asked to present to the class their own recommendations. Oral case presentations have a 30 minute time limit. Once the initial presentation is over, other students will be asked to comment on the previous presentation (15 minute time limit). Such comments should emphasize each group?s conclusions and supporting arguments. The discussion is open to all students in the class. Then, the instructor will highlight the main conclusions and the key learning benefits achieved with the case analysis and discussion. 

Written reports are expected to have the quality of presentations by consultants or investment bankers to the Board of Directors of a Company. They are usually submitted in Powepoint format. These reports should specifically address the issues raised by the instructor via a previously posted set of questions. All reports should start with a first-page "executive summary" that identifies main issues and summarises fundamental recommendations. Then, the report should address the issues raised by the instructor. There is a rather ?free format? for the reports, and emphasis should be placed on the originality of the analysis provided and the overall professional quality of the presentation. Mere repetition of case information is strongly penalised. Focus on the key issues is preferred against lengthy presentations of useless facts and data. The latter will also be severely penalised. 

All students are expected to actively participate in class. Absence in class of or poor class participation will be graded with zero . Class participation may either have a positive or negative impact on your grade. 

Evaluation method

Group (5 people per team) written reports on the case-studies: 35% (Each group is required to make 4 reports)

Group participation in the simulation 15%

Individual participation on class discussions and presentations 15% (This item will be strictly graded between 0-20)

Final Exam: 35% (Minimum required exam grade: 9.5 /20)

Subject matter

What?s different about new venture financing

How to analyse new venture ?opportunities? and teams

Structuring and analysing new venture business plans

Sources of value and valuation techniques for new ventures

Bootstrapping finance

Crowdfunding

Angel financing

The venture capital industry organisation

How venture capitalists evaluate investment opportunities

The asymmetry of information problems and the design of financial contracts aligning incentives between investors and entrepreneurial teams

Startups in financial distress

Venture Capital Financial Deals

Venture Capital Term Sheets

Venture Capital Exit Strategies

Venture Debt 

Programs

Programs where the course is taught: