This course is meant for students who want to start and manage their own businesses or who want to work for a venture capital organization. The goal of the course is to familiarize the students with the financial and organizational challenges typical of start-up companies. To do this, the course has been designed to be broad and comprehensive. While the course focuses primarily on the financial economics of entrepreneurial settings, issues from economics, strategy, organization, and control are integrated into the discussions.
The course, which is primarily case-based, covers issues of start-up financing, deal structure, incentive design, valuation of high risk projects, financial management in rapidly growing firms, initial public offerings, mergers and acquisitions, and reorganizations. Attention is also given to analyzing the suppliers of capital, including informal risk capital, commercial banks, venture capital firms, and investment banks.
For each class meeting, study questions will be assigned concerning a case study. We will discuss these questions and the material in the case for most of the class period. Each student will be required to submit a one- or two- page memorandum of analysis and recommendations before each case discussion. Group work is encouraged, but not required, on these short memoranda. Memoranda with up to three names on them are acceptable. We will use journal articles and some lectures to supplement and enhance the case discussions. All required cases and supplementary readings will be on the Chalk site.
Preassignment: Students are responsible for a memorandum for each case we discuss in the first class. The first class assignment is detailed on the Chalk site.