Description

The course provides a thorough understanding on financial decision making for small and medium companies from their start-up until the exit. The course starts with a refresher of basic finance theory. Students that have no background in finance should be aware that this is a very brief introduction to finance and are advised to study basic concepts beforehand. After that the empirics of returns to private equity will be discussed, i.e., how profitable is it to start a business. Afterwards, capital choices of small businesses will be illustrated. Some financing choices of entrepreneurs will be discussed in more details, namely relationship lending, crowd financing, and angel and venture capital. The course ends with an overview of exit choices of investors. All topics are covered via recent research articles that present important empirical results.

Program

MBA

Objectives

• During the course, the overarching objective of the course is for students to understand the financial aspects of the decision making process and day-to-day operations of a new, young, and small business venture. More specifically, by the end of the course, students will be able to: • Explain the key tactics and approaches to negotiation when attempting to structure financing deals for new, young, and small ventures. • Explain the factors which lenders/investors weigh most heavily when making investment decisions. • Construct, read and draw practical insights from the financial statements of a venture, and especially the cash flow statement. • Understand how to determine the amount of money an entrepreneur requires to successfully start and operate a venture. • Calculate the value of a venture and appreciate the many roles valuation plays in the creation and development of a venture. • Become familiar with the characteristics of the various debt and equity sources of financing available to new, young, and small businesses, and the factors which lenders/investors weigh most heavily when making investment decisions. • Formulate a deal structure for a start-up venture and grasp the multiple variables that can be introduced when structuring a deal. • Understand key tactics and approaches to negotiation when attempting to structure financing deals for new, young, and small ventures. • Recognize a company in financial distress and understand the options for the company.