Financing New Ventures
by Prof. Sandeep Dahiya
Every year thousands of new ventures are started and a nearly equal number of existing businesses are closed down. Almost all of these ventures are single founder/employee type of ventures where the founder has neither the desire nor the possibility of creating a significantly large business organization. A small fraction of such ventures, however, hold the promise to grow into large businesses. In this course we will focus heavily on such promising ventures or “startups”. The reason for this focus is self-evident - business that are unlikely to grow fast have little or limited need for external financing-making such ventures somewhat irrelevant for a course titled Financing New Ventures. This course is designed to illustrate challenges faced by an entrepreneur in financing and growing a new firm. Exploiting a promising opportunity frequently requires an entrepreneur to marshal scarce resources, especially external capital. The course will focus almost exclusively on issues relevant to the financing of entrepreneurial ventures. We acknowledge that marshalling talent, customers, regulators and other stakeholders is equally and at times even more important than raising financing in many entrepreneurial ventures. However, given that this is a “Finance” course, the primary focus will be on challenges faced by entrepreneurs in securing adequate capital to launch and to grow their ventures.
We shall devote significant amount of time on understanding the role of Venture Capital (and to a lesser degree on Angel Investors) in financing new start-ups. The course requires and reinforces the skills needed to analyze a business with a strong emphasis on financing deal terms and valuation techniques. The course concludes by examining the harvesting of entrepreneurial ventures whereby the entrepreneur and the financiers realize the returns for their effort. The course will use a number of case studies based on startups or young firms.
The course seeks to provide insights on the following issues:
What are the challenges of financing a new venture? How can these be addressed?
Who provides capital to entrepreneurs? What do these investors expect?
What are the key challenges in achieving growth of an entrepreneurial venture?
How and when should a successful venture be sold to generate cash for the founder(s) and financiers?
Monday, 27 June 2022: 9:30 - 12:00
Tuesday, 28 June 2022: 9:30 - 12:00
Wednesday, 29 June 2022: 9:30 - 12:00
Thursday, 30 June 2022: 9:30 - 12:00
Monday, 4 July 2022: 9:30 - 12:00
Tuesday, 5 July 2022: 9:30 - 12:00
Wednesday, 6 July 2022: 9:30 - 12:00
Thursday, 7 July 2022: 9:30 - 12:00
- Introduction to Financial Markets (Einführung in die Finanzmärkte, 23516)
- Introduction to the Evaluation of Investments and Companies (Einführung in die Investitions- und Unternehmensbewertung, 10127)
Attendance and good preparation are prerequisites for being a valuable participant in the class. You are expected to attend every class. Grading will be based on
- Class participation: 20%
- Case polls (These are Google Polls due by 7:00 AM on date of class): 10%
- In-class quiz: 20%
- Final exam: 50%.
Date of final exam: 12 July 2022
Prof. Sandeep Dahiya
Associate Professor of Finance
McDonough School of Business,
Georgetown University, Washington D.C.