Entrepreneurial Finance

2020/2021

Academic Year

ENG

Instruction in English

5

ECTS credits

Delivered at:

School of Finance

Course type:

Elective course

When:

2 year, 1, 2 module

Instructor

Guseva, Olga

Course Syllabus

Abstract

Financing a new venture is considered to be one of the main barriers facing the entrepreneurs in both developed and developing markets. Although the basic concepts of corporate finance course are relevant for startup funding, special aspects of investing in startup (such as opacity, illiquidity and specificity) require deeper understanding of venture capital markets and entrepreneurs’ activities. This course covers financing process during all stages of startup life cycle and is designed for students who are interested in entrepreneurship as startup founder, employee or investor. The course provides students with theoretical concepts of entrepreneurial finance and uses case-oriented approach to demonstrate problems facing entrepreneurs and venture investors. Ссылка на онлайн-курс: https://www.coursera.org/learn/startup-valuation-methods#syllabus

Learning Objectives

• Provide students with a broad understanding of concepts in entrepreneurial finance and explain special aspects of funding new ventures as opposed to financing of mature companies considered in standard corporate finance theory
• Provide students with a framework for making decisions about financing of a new venture from entrepreneur’s and investor’s points
• Explain the difference between types of venture investors and institutions involved in financing of new ventures
• Prepare students to make effective presentations of investment opportunities from entrepreneur’s and investor’s side

Expected Learning Outcomes

• Apply methods of valuation for a new venture
• Evaluate challenges and discuss risks facing entrepreneurs in developed and developing markets
• Make effective and well-timed decisions about new venture financing and harvesting
• Develop communication and presentation skills for capital raising, formulating business plan, strategies
• Identify exit strategies and explain venture harvesting process

Course Contents

• 1
  Introduction. Entrepreneurship: from idea to business. Identification of entrepreneurial opportunities. Innovative industries. Technology entrepreneurship.
• 2
  Entrepreneurial characteristics. Corporate governance and entrepreneurial firms
• 3
  New venture life cycle. Financing sources at different stages of life cycle. Business plan development.
• 5
  New venture valuation. Real option valuation. Entrepreneur’s and venture capital fund’s perspective on valuation.
• 6
  Venture capital and private equity finance: organization, investment selection. Government venture funds. Guest speakers.
• 7
  Deal terms. Incentive problems, information problems. Contract design. Exit options. Turnaround strategies.

Assessment Elements

• Case in class - Group work
• Homework - business plan preparation
• Homework - valuation exercise
• Homework - written case
• Group project - pitching an idea of a new venture

Interim Assessment

• Interim assessment (2 module)
  0.15 * Case in class - Group work + 0.4 * Group project - pitching an idea of a new venture + 0.15 * Homework - business plan preparation + 0.15 * Homework - valuation exercise + 0.15 * Homework - written case

Bibliography

Recommended Core Bibliography

• Alhabeeb, M. J. (2015). Entrepreneurial Finance : Fundamentals of Financial Planning and Management for Small Business. Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=957003
• Entrepreneurial finance, Smith, R. L., 2004

Recommended Additional Bibliography

• Entrepreneurial finance, Leach J.C., Melicher R.W., 2006
• Research handbook on entrepreneurial finance, , 2017
• Venture capital and the finance of innovation, Metrick, A., 2011