| CODE | BKF5180 | |||||||||
| TITLE | Entrepreneurial Finance | |||||||||
| UM LEVEL | 05 - Postgraduate Modular Diploma or Degree Course | |||||||||
| MQF LEVEL | Not Applicable | |||||||||
| ECTS CREDITS | 5 | |||||||||
| DEPARTMENT | Banking and Finance | |||||||||
| DESCRIPTION | Key topics covered in the Entrepreneurial Finance study-unit include: the study of the nature, purpose and construction of financial planning and reporting statements; the financial risks/rewards of entrepreneurship and innovation; new venture financial models and strategies; typical funding sources; the development of business plans to attract outside funding; new venture valuation; strategies for negotiating financial contracts; exit strategies. Study-Unit Aims: This study-units aims to provide the requisite understanding, knowledge and skills to enable students to understand the nature and characteristics of financial planning in the context of entrepreneurship and innovation and the life cycle of new venture firms. Learning Outcomes: 1. Knowledge & Understanding By the end of the study-unit the student will be able to: - Understand the nature of entrepreneurial finance; - Understand theoretical and conceptual underpinning of and frameworks for accounting and financial management; - Understand the nature, purpose and characteristics of income statements, cash flow statements, balance sheets as financial reporting mechanisms; - Understand the use of financial ratios in measuring and interpreting financial performance; - Understand the financial risks/rewards of entrepreneurship; - Understand the construction of new venture financial models; - Understand the evaluation of alternative new venture strategies; - Understand the development of a business plan to attract outside funding; - Understand the due diligence process; - Understand the design and negotiation of “deals” and term sheets; - Understand the institutions of new venture finance and associated custom and protocol. 2. Skills By the end of the study-unit the student will be able to: - Understand the entrepreneurial finance process with the aim to meet specified goals for the benefit of entrepreneurs and investors; - Combine an in-depth understanding of the assumptions/limitations of venture valuation together with hands-on experience dealing with venture capital term sheets; - Develop the critical and analytical skills required to be successful in the current early-stage financing environment. Main Text/s and any supplementary readings: Main Texts - LEACH, J.C. & MELICHER, R.W. 2017. Entrepreneurial Finance, South Western Educational Publishing, 6th Edition, 698 pages. ISBN: 1305968352. Recommended Textbooks for the Case Study - METRICK, Andrew, and Ayako YASUDA, 2011. Venture capital and the finance of innovation (Wiley, New York). - WILMERDING, Alex, 2002. Term sheets and valuations: A line by line look at the intricacies of term sheets and valuations. Supplementary Readings - Barry, C. B., C. J. Muscarella, J. W. Peavy, and M. R. Vetsuypens, 1990, The role of venture capital in the creation of public companies - evidence from the going-public process, Journal of Financial Economics 27, 447-471. - Brav, A., P. A. Gompers, and Yk, 1997, Myth or reality? The long-run underperformance of initial public offerings: Evidence from venture and nonventure capital-backed companies, Journal of Finance 52, 1791-1821. - Cochrane, J. H., 2005, The risk and return of venture capital, Journal of Financial Economics 75, 3-52. - Cumming, D. ed., 2012. The Oxford Handbook of Venture Capital (Oxford University Press, Oxford). - Gompers, P. A., 1995, Optimal investment, monitoring, and the staging of venture capital, Journal of Finance 50, 1461-1489. - Gompers, P. A., 1996, Grandstanding in the venture capital industry, Journal of Financial Economics 42, 133-156. - Gompers, P., A. Kovner, J. Lerner, and D. Scharfstein, 2008, Venture capital investment cycles: The impact of public markets, Journal of Financial Economics 87, 1-23. - Gompers, Paul, and Josh Lerner, 2004. The venture capital cycle (MIT Press, Cambridge, Mass.). - Gorman, M., and W. A. Sahlman, 1989, What do venture capitalists do, Journal of Business Venturing 4, 231-248. - Hall, J., C. W. Hofer, and Kf, 1993, Venture capitalists decision criteria in new venture evaluation, Journal of Business Venturing 8, 25-42. - Hochberg, Y. V., A. Ljungqvist, and Y. Lu, 2007, Whom you know matters: Venture capital networks and investment performance, Journal of Finance 62, 251-301. - Kaplan, S. N., B. A. Sensoy, and P. Stromberg, 2009, Should investors bet on the jockey or the horse ? - Evidence from the evolution of firms from early business plans to public companies, Journal of Finance 64, 75-115. - Kaplan, S. N., and P. Stromberg, 2003, Financial contracting theory meets the real world: An empirical analysis of venture capital contracts, Review of Economic Studies 70, 281-315. - Kerins, F., J. K. Smith, and R. Smith, 2004, Opportunity cost of capital for venture capital investors and entrepreneurs, Journal of Financial and Quantitative Analysis 39, 385-405. - Kortum, S., and J. Lerner, 2000, Assessing the contribution of venture capital to innovation, Rand Journal of Economics 31, 674-692. - Landstrom, H, Mason, C. eds., 2012. The Handbook of Research on Venture Capital: A Globalising Industry (Edward Elgar, Cheltenham). - Lerner, J., 1994, Venture capitalists and the decision to go public, Journal of Financial Economics 35, 293-316. - Manigart, S., K. De Waele, M. Wright, K. Robbie, P. Desbrieres, H. J. Sapienza, A. Beekman, and Bk, 2002, - Determinants of required return in venture capital investments: A five-country study, Journal of Business Venturing 17, 291-312. - Metrick, Andrew, and Ayako Yasuda, 2010. Venture capital and the finance of innovation (Wiley, New York). - Nadeau, Pierre, 2011, Innovation and venture capital exit performance, Strategic Change: Briefings in Entrepreneurial Finance 20, 233-252. - Neus, W., and U. Walz, 2005, Exit timing of venture capitalists in the course of an initial public offering, Journal of Financial Intermediation 14, 253-277. - Ruhnka, J. C., H. D. Feldman, and T. J. Dean, 1992, The living dead phenomenon in venture capital investments, Journal of Business Venturing 7, 137-155. - Sahlman, W. A., 1990, The structure and governance of venture-capital organizations, Journal of Financial Economics 27, 473-521. - Smith, Janet Kiholm, Richard L. Smith, and Richard T. Bliss, 2011. Entrepreneurial finance: Strategy, valuation and deal structure (Stanford University Press, Stanford). |
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| STUDY-UNIT TYPE | Lecture and Seminar | |||||||||
| METHOD OF ASSESSMENT |
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| LECTURER/S | Pierre Nadeau |
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The University makes every effort to ensure that the published Courses Plans, Programmes of Study and Study-Unit information are complete and up-to-date at the time of publication. The University reserves the right to make changes in case errors are detected after publication.
The availability of optional units may be subject to timetabling constraints. Units not attracting a sufficient number of registrations may be withdrawn without notice. It should be noted that all the information in the description above applies to study-units available during the academic year 2023/4. It may be subject to change in subsequent years. |
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