Financing New Ventures
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?
Duration: 29 June - 9 July 2020
Online Course via ZOOM
Monday, 29 June 2020: 15.00-17.30
Tuesday, 30 June 2020: 15.00-17.30
Wednesday, 1 July 2020: 15.00-17.30
Thursday, 2 July 2020: 15.00-17.30
Monday, 6 July 2020: 15.00-17.30
Tuesday, 7 July 2020: 15.00-17.30
Wednesday, 8 July 2020: 15.00-17.30
Thursday, 9 July 2020: 15.00-17.30
- 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: 10 July 2020, (12 hours-take home exam)
- Introduction to Financial Markets (Einführung in die Finanzmärkte, 23516)
- Evaluation of Investments and Companies (Investitions- und Unternehmensbewertung, 10127)
- Course directory
- Syllabus: see ADAM workspace
- Reading Material: ADAM workspace