Entrepreneurial Finance

Course Number 1624

Visiting Faculty Shai Bernstein (Associate Professor of Finance, Graduate School of Business, Stanford University)
Senior Lecturer Jim Matheson
Fall; Q1Q2; 3 credits
28 Sessions

Professor Paul A. Gompers
Spring; Q3Q4; 3 credits
28 Sessions

Career Focus

Entrepreneurial Finance is primarily designed for students who plan to get involved with a new venture at some point in their career -- as a founder, early employee, advisor or investor. However, the course is also appropriate for students interested in gaining a broader view of the financing landscape for young firms, going beyond the basics of venture capital and angel financing to look at venture debt, bank finance, corporate venture capital and receivables financing.

Course Content and Educational Objectives

The goal of Entrepreneurial Finance is to help managers make better investment and financing decisions in entrepreneurial settings. The course covers all stages of the venture's life cycle from startup to exit, and delves into issues such as deal structures, incentives, business models and valuation in much greater detail than TEM. Approximately one-third of the cases concern technology-based businesses, though the emphasis is on gaining insights into entrepreneurial management, not technology per se. Typically, case protagonists have participated in over half the class discussions.

The first two modules of the course address key issues faced by entrepreneurs: how much money should be raised at each stage; when should it be raised; what is a reasonable valuation of the company; and how should funding, employment contracts and exit decisions be structured. They aim to prepare students for these decisions, both as entrepreneurs and as investors.

The next three modules look at a variety of financing models across the venture's life cycle, with an aim to understanding the incentives of each type of investor, the relative costs and benefits of each source of funding and the connections between a venture's financing strategy and its product-market strategy.

Inevitably, there will be some overlap with courses such as Launching Global Ventures, Financial Management of Smaller Firms and Venture Capital and Private Equity. We are aware of the content of each of those courses and will be sensitive to differentiation.