Entrepreneurial Finance
6 ECTS Module for Master Students
Credits
- 6 ECTS module
- 2 courses
Entrepreneurial Finance: Lecture&Entrepreneurial Finance: Case Studies
Target Audience
- Master students in IWI, LIM, GTIME & Exchange Programs
Instructor(s)
Overview
Entrepreneurial finance is at the center of a clash of two very distant worlds: that of entrepreneurship and that of finance. Finance is disciplined, based on numbers and logical thinking and looking for proven track records. Entrepreneurship is messy, based on intuition and experimentation and treading off the beaten track. Entrepreneurial finance is the provision of funding to young, innovative, growth-oriented companies. Entrepreneurial companies are young, typically less than ten years old, and introduce innovative products or business models. The younger are called “startups,” and are typically less than five years old.
There is a variety of investors who can finance entrepreneurial companies: family and friends, business angels, accelerators and incubators, crowdfunding platforms, venture capital firms, corporate investors, etc. The course provides a thorough understanding of what motivates them, of the way they invest, and of what support they can provide to a company at what stage in the fundraising cycle. The course addresses the following key questions: How much money can and should be raised? When should it be raised and from whom? What is a reasonable valuation of the company? How should funding, employment contracts and exit decisions be structured?
Thus, the course provides an understanding of the whole fundraising cycle, from the moment the entrepreneur conceived her idea to the moment investors exit the company and move on. We examine the entrepreneur's signalling to investors of the qualities of the venture, the investors' evaluation of the venture, the various dimensions of contracting (cash flow rights, control rights, compensation, and other clauses), the negotiation of a deal and the provision of corporate governance, the process of staged financing, the financing through debt, and the exit process though liquidity events such as initial public offering, sale or merger.
The workflow in this module is comprised of two course elements:
- (Flipped) classroom: learning about and discussing concepts and tools currently prevailing in theory and practice of modern entrepreneurial finance.
- Problem-based learning: deepen an understanding of the concepts and tools by seeing them applied and applying them to real company cases.
Objectives
Upon completion of this course module, students will be able to:
- Prepare a financial plan for a new venture or business opportunity
- Engage in financial valuation for new ventures and business opportunities
- Understand the design of financial contracts
- Analyze and evaluate growth and exit strategies
This course module can prepare students for the following career paths:
- Startup founder or early employee in a startup
- Venture capital investing
- Strategy & valuation consulting
- Corporate finance
Textbook
Grading
70%(individual): Written case solutions submitted after class (for 7 out of 10 cases)30%(individual): Oral class participation
Registration
- Open until October 22nd on e-learning.tuhh.de/studip
Time & Location
Entrepreneurial Finance: Lecture: Monday, 13.15 - 14.45, Building N , Room 0008Entrepreneurial Finance: Case Studies: Monday, 15.00 - 17.15, Building N , Room 0008
Course Notes & Materials
Access to course notes & materials here. Password to be found on Studip.
Preliminary Schedule
| Session | Date | Topic |
|---|---|---|
| 1 | October 23rd | Online-Introduction: Evaluating Venture Opportunities |
| - | October 30th | No class |
| 2 | November 6th | Financial Planning |
| 3 | November 13th | Ownership and Returns |
| 4 | November 20th | Valuation Methods I |
| 5 | November 27th | Valuation Methods II |
| 6 | December 4th | Early Stage and Venture Capital Investors |
| 7 | December 11th | Term Sheets |
| 8 | December 18th | Structuring Deals |
| - | Dec 24th - Jan 7th | Christmas Holiday |
| 9 | January 8th | Staged Financing |
| 10 | January 15th | Debt Financing |
| 11 | January 22nd | Corporate Governance |
| 12 | January 29th | Exits |
Prof. Dr. Christoph Ihl
Professor & Head of Institute
My research interests include cultural entrepreneurship, social networks and natural language processing.
Oliver Specht
Research Assistant & Doctoral Student
My research interests are technology entrepreneurship and venture capital financing.