Entrepreneurial Finance

Course Number 1624

Professor William A. Sahlman
Associate Professor Ramana Nanda
Senior Lecturer Robert F. White Fall; Q1Q2; 3 credits
28 Sessions
Exam

Career Focus
Entrepreneurial Finance is primarily designed for students who plan to get involved with a new venture at
some point in their career -- as a founder, early employee, advisor or investor. However, the course is also
appropriate for students interested in gaining a broader view of the financing landscape for young firms,
going beyond the basics of venture capital and angel financing to look at venture debt, bank finance,
corporate venture capital and receivables financing.

Course Content and Educational Objectives

The goal of Entrepreneurial Finance is to help managers make better investment and financing decisions in
entrepreneurial settings. The course covers all stages of the venture's life cycle from startup to exit, and
delves into issues such as deal structures, incentives, business models and valuation in much greater detail
than TEM. Approximately one-third of the cases concern technology-based businesses, though the emphasis
is on gaining insights into entrepreneurial management, not technology per se. Typically, case protagonists
have participated in over half the class discussions.
The first two modules of the course address key issues faced by entrepreneurs: how much money should be
raised at each stage; when should it be raised; what is a reasonable valuation of the company; and how
should funding, employment contracts and exit decisions be structured. They aim to prepare students for
these decisions, both as entrepreneurs and as investors.
The next three modules look at a variety of financing models across the venture's life cycle, with an aim to
understanding the incentives of each type of investor, the relative costs and benefits of each source of
funding and the connections between a venture's financing strategy and its product-market strategy.
Inevitably, there will be some overlap with courses such as Launching Global Ventures, Financial
Management of Smaller Firms and Venture Capital and Private Equity. We are aware of the content of each
of those courses and will be sensitive to differentiation.