Entrepreneurial Finance

Course goals

Learning objectives
At the end of the course the student is able to:

• Have insight into the mechanisms of crowdfunding
• Have insight into various forms of private equity in funding an entrepreneurial firm
• Understand the differences between business angels and venture capital
• Be able to develop and read a financial plan and to understand cash management of start-ups
• Be able to conduct a basic valuation of a new venture.
• Have a broad understanding of the IPO process (going public).

Content

Please note the prerequisites for this course at the bottom of the course description.

The aim of this course is to provide students with insights into the complexities of attracting financing for start-ups and entrepreneurial firms. We follow the life-cycle of a new venture and discuss the various sources of financing. We analyse the possibilities of crowdfunding in launching a new idea or venture in part one. We discuss the various forms of crowdfunding and how they can support a start-up. Part two discusses different forms of private equity financing, starting from more informal business angel financing towards more formal funding through venture capitalists or private equity funds. As young firms often burn a lot of cash before becoming profitable, we zoom in on financial planning, accounting measures and cash management. This is a very important aspect of firm survival and guiding the firm towards a more mature life-cycle phase. Part four discusses the exit possibilities for the founders, early investors and later-round investors. We discuss potential tensions between social values and financial values, between valuation and price of the venture. We analyse different valuation models to get more grip on the valuation process and gain insight in the negotiation process of selling a company. Finally, we discuss going public as an important exit channel for entrepreneurial firms. We discuss the transition process through which a private company becomes public by offering part of its equity to public shareholders. The course intensively uses real-life case studies.

In case online access is required for this course and you are not in the position to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not re-usable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN. Separate or spare codes are usually not available.