Introduction to Entrepreneurial Finance

Paul A. Gompers

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Background Note | HBS Case Collection | November 1997 (Revised May 2001)

Introduction to Entrepreneurial Finance

by Paul A. Gompers

Abstract

Presents an overview of the issues covered in Entrepreneurial Finance. The frameworks of analysis as well as themes of the course are covered. Additionally, provides references on entrepreneurial finance from both academics and the popular press.

Keywords: Entrepreneurship; Corporate Finance;

Format: Print

13 pages

Educators Purchase

Citation:

Gompers, Paul A. "Introduction to Entrepreneurial Finance." Harvard Business School Background Note 298-061, November 1997. (Revised May 2001.)

About the Author

Paul A. Gompers

Eugene Holman Professor of Business Administration

Finance

Entrepreneurial Management

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Article | Journal of Financial Economics | January 2020

How Do Venture Capitalists Make Decisions?

Paul A. Gompers, William Gornall, Steven N. Kaplan and Ilya A. Strebulaev

We survey 885 institutional venture capitalists (VCs) at 681 firms to learn how they make decisions across eight areas: deal sourcing, investment selection, valuation, deal structure, post-investment value-added, exits, internal firm organization, and relationships with limited partners. In selecting investments, VCs see the management team as more important than business-related characteristics such as product or technology. They also attribute more of the likelihood of ultimate investment success or failure to the team than to the business. While deal sourcing, deal selection, and post-investment value-added all contribute to value creation, the VCs rate deal selection as the most important of the three. We also explore (and find) differences in practices across industry, stage, geography, and past success. We compare our results to those for CFOs (Graham and Harvey 2001) and private equity investors (Gompers, Kaplan, and Mukharlyamov forthcoming).

Keywords: Venture Capital; Value Creation; Capital Structure; Entrepreneurship; Decision Making;

Citation:
Gompers, Paul A., William Gornall, Steven N. Kaplan, and Ilya A. Strebulaev. "How Do Venture Capitalists Make Decisions?" Journal of Financial Economics 135, no. 1 (January 2020): 169–190. View Details

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Course Overview Note | December 2019

Introduction to Entrepreneurial Finance - 2020

Paul A. Gompers

Citation:
Gompers, Paul A. "Introduction to Entrepreneurial Finance - 2020." Harvard Business School Course Overview Note 220-050, December 2019. View Details

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Case | HBS Case Collection | December 2019

Entrepreneurial Finance Vignettes - 2020

Paul A. Gompers

Citation:
Gompers, Paul A. "Entrepreneurial Finance Vignettes - 2020." Harvard Business School Case 220-049, December 2019. View Details

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Introduction to Entrepreneurial Finance

Abstract

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