Entrepreneurial Finance

Course Number 1624

Professor William A. Sahlman
Associate Professor Ramana Nanda
Fall; Q1Q2; 3 credits
28 Sessions
Exam

Course Content and Educational Objectives

Entrepreneurial Finance is designed to help managers make better investment and financing decisions in entrepreneurial settings. The course covers all stages of the process, from startup to harvest. Approximately one-third of the cases concern technology-based businesses, though the emphasis is on gaining insights into entrepreneurial management, not technology per se. The course extends the concepts introduced in TEM in the First Year, particularly with respect to risk reward management. The course also focuses more attention on deal structuring and incentives. In recent years, approximately one-third of the cases are new. Case protagonists participated in over half of the class discussions. There is a module on emerging trends in entrepreneurial finance, covering the financing of clean tech startups well as the rising importance of Angel investors.

Though the course is called Entrepreneurial Finance, the course differs in philosophy and style from a course like First Year Finance. That course is designed to focus on the numbers and the analytical techniques for gaining insight. Entrepreneurial Finance integrates people into the equation by taking into account their capabilities, their incentives, and the cognitive biases they bring to decision making. Students should not take the course as a remedial finance course. The course will go into greater depth than possible in the First Year with respect to structuring multi-staged financings, understanding business models, and valuing entrepreneurial ventures.

The course is aimed primarily at people who may be involved in an entrepreneurial venture at some point in their careers whether in a large organization, a turnaround, a management buyout or a startup. The course will also be useful for future private equity decision maker.

Inevitably, there will be some overlap with The Entrepreneurial Manager, International Entrepreneurship, and Venture Capital and Private Equity. We are aware of the content of each of those courses and will be sensitive to differentiation.