Have you ever wondered how to get the right Angel investment for your start-up idea or Series A/B fundings for a fast growing company? Or you have an admiration to become a Venture Capitalist that will discover and help grow the next Unicorn like Airb&b, Uber, Ant Financial, Robinhood etc? If so, the Global Entrepreneurial Finance: Venture Capital and Private Equity is an introductory course into the creative and mysterious world of the venture capital (VC) and private equity(PE) investments. This course will bring in the latest and most used VC/PE investment methodologies and practical tools from Silicon Valley, the heart of the global VC/PE industry. “Entrepreneurship” is a popular focus of discussion among businesspeople, financiers, economists, and policymakers. At a macro level, economists and policymakers have increased their attention to entrepreneurial enterprise because of its importance to economic growth, the significance of entrepreneurial businesses in job creation, and the role of business owners in aggregate saving and wealth accumulation. Today on the demand side, many M.B.A. students want to start their own businesses or be part of emerging businesses, while on the supply side, other M.B.A.s are interested in participating directly in the growth of venture capital and private equity sector. What, then, is “entrepreneurial finance”? The second term is easier to define. We know that Finance studies encompass valuation and the allocation of resources, risk, liquidity, and information. Indeed, topics in finance related to valuing cash flows, assessing the cost of capital, choosing among suppliers of funds, and aligning incentives for value maximization are at least as important for entrepreneurial firms as for more established firms. In particular, new and growing firms likely face “financing constraints” on growth and difficult decisions about financial contracting; while present-day financial decisions may have a profound influence on the available range of future options and choices. Defining entrepreneurship is less straightforward. Consistent with many popular characterizations of entrepreneurs, the noted Harvard economist Joseph Schumpeter summarized an entrepreneur as follows: “To act with confidence beyond the range of familiar beacons and to overcome that [social] resistance requires aptitudes that are present only in a small fraction of the population and that define the entrepreneurial type...” (Capitalism, Socialism, and Democracy, New York: Harper and Row, 1942, page 132.) Actually studying entrepreneurship requires a narrower focus. The economic concept corresponding most to topics we discuss in this course as “entrepreneurial finance” was articulated by Chicago economist Frank Knight who argued that entrepreneurs must address problems of raising capital and bearing risk in addition to identifying and pursuing opportunity. [Frank H. Knight, Risk, Uncertainty, and Profit, New York: Houghton Mifflin, 1921.] Throughout the course, we will emphasize such financial management decisions of entrepreneurial firms. We define an entrepreneur as the person who puts the pieces together, identifies the new opportunity and/or market imperfection, connects the dots, and brings about change. Entrepreneurship may take place in small start-ups as well as large established firms. The entrepreneur may be the inventor, the financier, the manager, or somebody else entirely. The capital market for financing such entrepreneurs – and private equity investing more generally – differs fundamentally from capital markets considered in standard corporate finance: First, start-ups are young, mostly unprofitable companies, with short operating histories and little capital. Young firms face exceptionally high degrees of uncertainty, constraining financing and creating difficult decisions about financial contracting, keeping in mind that today’s financial decisions may have implications for future opportunities and choices. Second, capital markets for privately held companies are predominantly “deal markets” where terms and valuations are negotiated on a case-by-case basis, where investors can add value and are actively involved with the companies they finance. Throughout the course, we emphasize financial opportunities and decisions of entrepreneurs and private equity investors investing in these entrepreneurs.

We will start with investigating the overall ecosystem and relationship between start-ups, VC’s, and Fund of Funds; then we will pick up the practical tools on the legal framework, organizational structures, funding channels and types, pre and post-money valuation methodologies, and pipeline generation. Later in the course we will deep dive into the exiting strategies including M&A, roadshow preparation, IPO, (Leveraged) Buyout, secondary market sales, and final LP/GP distributions. Throughout the course, students will be tracking the current start ups and VC/PE funding rounds as they happen and cross-reference these real life deals with the tools and methodologies delivered in this course.

Basic understanding of managerial accounting and corporate finance is ideal but not a must; some experiences with start-ups would be a plus. A keen interest in how private investment and alternative investment works in the context of macro and micro economics and capital market performances. The course is OPEN TO ALL NTU STUDENTS including foreign exchange students, pending on final approve by the course instructor via an authorization code for registration.

approx. 4-6 hours

Course materials will be distributed as downloadable files via NTU COOL system. Most materials will be based on Harvard Business School cases related to the weekly assigned subjects. There will be approx. between 8 to 10 cases to be purchased directly by each students directly online from Harvard Business Publishing.

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