Module FINN2127: Entrepreneurial Finance

Department: Finance

FINN2127: Entrepreneurial Finance

Prerequisites

• None

Corequisites

• None

Excluded Combination of Modules

• None

Aims

• To introduce students to fundamentals of valuation techniques and early-stage business funding options.
• To provide students with frameworks and skills necessary to understand and critically evaluate innovative business prospects, intangible assets, growth opportunities and early-stage business funding options both on buy and sell-sides.
• To provide students with the opportunity to develop knowledge and understanding of key concepts and issues in financing innovative businesses using financial intermediation and private capital market channels such as angel investing, venture capital and private equity.
• To improve the external engagement of the programme via the involvement and contributions of the industry representatives.
• To develop students' ability to evaluate academic literature relating to new venture creation, alternatives for funding growth, and exit strategies towards public financing and incorporate these to analysis of industry case examples.

Content

• Introduction to fundamental financial analysis and business valuation;
• Identifying innovative business opportunities and early-stage funding options;
• The role of financial intermediation, credit and banking industry;
• Early-stage business financing: Angel investors, incubators and public partnerships, crowdfunding, and peer-to-peer lending;
• Financing business growth: Introduction to venture capital;
• Financing expansion: Private equity, hedge funds, mutual funds, and SWFs;
• Partnerships (GPs and LPs) and fund formations;
• Raising funds and due diligence for venture capital and private investors;
• Exit strategies for early investors: Sale, LBOs, IPOs, securitisation and public markets;
• Risks, disclosure and regulation in private markets.

Learning Outcomes

• An understanding of the processes for evaluating innovative businesses and their growth opportunities;
• Knowledge of the way in which private financial markets operate;
• An understanding of the financing processes for new businesses from early stages to maturity;
• Knowledge of the alternative methods of fund raising in private markets and how to choose amongst the alternatives depending on venture’s characteristics and objectives;
• Ability to offer advise on these funding channels on the sell-side and ability to evaluate net positive value alternative projects within the market conditions.
• Understanding the main risks and regulatory requirements in funding markets.

• Recognize the financial growth potential for innovative businesses;
• Develop technical and academic skills for evaluating early-stage businesses;
• Gain ability to understand how to employ different financing methods and identify the appropriate options depending on the firm’s characteristics and capabilities and the market conditions;
• Develop skills to examine practical issues and case studies, practice problem-solving and analysis of financing of early-stage investments;
• Develop skills to critically evaluate developments, performance and progress of businesses in relation to alternative funding mechanisms;
• Assess the regulatory approaches used in different jurisdictions to understand various ways in which private market institutions are integrated into the broader financial system.

• Written Communication - through summative assessment.
• Presentation – by preparing presentations for both formative and summative assessments. The formative assessment feedback will be provided by an industry funding manager representative to improve market experience of the students.
• Planning and organisation and time management - by preparing for workshops, by observing the strict assignment deadline and by preparing for the summative assessment.
• Problem-solving and analysis - by applying the necessary analytical skills to identify business growth and funding strategies and by implementing valuation techniques.
• Computer literacy – by ability to seek out and use relevant information and data sources, including electronic and bibliographic sources
• Initiative – by independent learning within a defined framework of study.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

• Teaching is by workshops. Learning takes place through attending workshops, preparations and participation at these, and support for private study.
• Given the practice-oriented approach, a semi-flipped or flipped classroom approach will be utilised.
• Practical case examples, analysis, and discussions provide technical awareness of topics in a comprehensive form.
• Formative assessment will be a group presentation prepared by students on a pre-assigned industry case and feedback will be provided both by the module team and a venture capital fund manager.
• Summative assessment comprises a 1 hour Multiple Choice Examinations (30%) and a 4,000 words group written assignment in the form of a case analysis and group presentation (70%) as the end product to test students' subject-specific knowledge and understanding, which requires students to undertake a critical evaluation of the chosen topic in entrepreneurship and venture capital.

Teaching Methods and Learning Hours

Summative Assessment

Formative Assessment:

Presentation on week 7 on the progress of the summative assignment.

■ Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University