Course Code: 30532, Lectures: 2, Credits: 2
Prerequisites: Engineering Economics and Entrepreneurship (30511)
Acquaintance with the methods of evaluation and finance, commonly used in Israel and overseas, for raising capital for technological entrepreneurship (start-up companies) during their entire life cycle.
In the course, we will examine the entrepreneur’s considerations on raising capital. An understanding of the external finance suppliers’ objectives will help the entrepreneur to create an application for finance, and, sometimes, will even impact the entrepreneur’s choice of commercial model. The course will survey the impact of the business model on the finance needs and the company’s value.
The course will also cover the terms and methodology used in the process of raising finance: estimating the value of a start-up company Up Round / Down Round, Cap Table, and those that are significantly involved in raising capital by increasing / decreasing value, and due diligence.
The main finance providers include the public market (issuing shares or bonds) and other finance suppliers such as Venture Capital Funds, Private Equity Funds, Venture Lenders, Angel Investors, Industrial Funding, Incubators, Government Support, and Commercial Banks.
The course will emphasize the following topics:
- Project risk-return ratio.
- Differences in financing new technological ventures versus traditional fields of economics.
- Impact of the entrepreneur’s (or group of entrepreneurs’) previous experience on choice of finance and the chances of obtaining it.
- Ventures with tangible assets as opposed to non-tangible assets (all the various types).
At the conclusion of the course, students will know how to 1) prepare a business plan to raise capital for technological ventures and 2) plan the use of the resources according to the needs of the venture. The course is an interactive course based on previous knowledge in the fields of accountancy, economics, and finance.
- John Lerner, et al., Venture Capital, Private Equity and the Financing of the Entrepreneurship, 1st, 2012, J. Willey & Sons.
- Oren Fuerst, et al., From Concept to Wall-Street, 1st ed., 2002, F.T. Prentice
- Howard H. Stevenson and Michael J. Roberts, “New Venture Financing” Harvard Business School, August 1, 2006 9-802-131 (SR)
- Michael J. Roberts and Lauren Barley, “How Venture Capitalists Evaluate Potential Venture Opportunities”, Harvard Business School, December 1, 2004 9-805-019
- Vaynerchuk, The new Engine for Success in Business, 2011, Matar
- H. Maynard, et al., Business Planning: Financing the Start-Up and Venture Financing, 1st ed., 2010, Aspen Publishers.