Entrepreneurial Finance

6 ECTS Module for Master Students (formerly Corporate Entrepreneurship and Growth)

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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:
  1. (Flipped) classroom: learning about and discussing concepts and tools currently prevailing in theory and practice of modern entrepreneurial finance.
  2. 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 11 cases)
  • 30% (individual): Oral class participation

Registration


Time & Location

  • Entrepreneurial Finance: Lecture: Monday, 13.00 - 14.30, Buidling Q, Room 1.21
  • Entrepreneurial Finance: Case Studies: Monday, 15.00 - 17.30, Buidling Q, Room 1.21
As long as the current situation stands, physical meetings will be replaced by online and video conference sessions to which registered participants will receive access in due time.

Course Notes & Materials

Access to course notes & materials here.


Preliminary Schedule

SessionDateTopic
1November 2ndIntroduction: Evaluating Venture Opportunities
2November 9thFinancial Planning
3November 16thOwnership and Returns
4November 23rdValuation Methods
5November 30thEarly Stage and Venture Capital Investors
6December 7thTerm Sheets
7December 14thStructuring Deals
-Dec 20th - Jan 3rdChristmas Holiday
8January 4thStaged Financing
9January 11thDebt Financing
10January 18thCorporate Governance
11January 25thExit
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Prof. Dr. Christoph Ihl
Professor & Head of Institute

My research interests include cultural entrepreneurship, social networks and natural language processing.

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Dr. Hannes W. Lampe
Research Associate & Post-Doc

My research interests lie at the intersection of Technologie, Innovation and Entrepreneurhip (TIE) and Public and Nonprofit Management (PNP).