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2016/2017  KAN-CCMVV5029U  Venture Capital and Private Equity

English Title
Venture Capital and Private Equity

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration One Semester
Start time of the course Autumn, Spring
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 60
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Morten Sørensen - Department of Finance (FI)
Teachers: Martin Vang Hansen & Morten Sørensen
Contact information: https:/​/​e-campus.dk/​studium/​kontakt
Main academic disciplines
  • Finance
Last updated on 12-04-2016
Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors: The main objective is to familiarize the students with the typical structures, practices, investment rationales, and financial methods used by private equity investors, such as venture capital and buyout funds. More precisely, the learning objectives of the course are stated below:
  • Account for the typical structure, features, and terminology used in the PE industry, including those in the cases discussed in class.
  • Account for and explain the economic reasoning behind the typical structures and features of PE investments, including those described in the cases discussed in class.
  • Explain the typical structure of a term sheet used by VC funds investing in entrepreneurial start-ups, including the meaning and implications of the individual terms.
  • Apply the quantitative and qualitative models from the syllabus and class materials to evaluate a situation involving a PE investment
  • Explain the assumptions behind the quantitative models from the syllabus and class materials and demonstrate the application of these to correctly solve a given problem.
Course prerequisites
The students should have a standard Master’s level course in Corporate Finance.
Venture Capital and Private Equity:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual exam
Assignment type Multiple choice AND written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Winter and Summer
Aids allowed to bring to the exam Limited aids, see the list below:
  • Written sit-in-exam on CBS' computers
  • Written sit-in-exam with pen and paper
  • Books and compendia brought by the examinee
  • Notes in paper format brought by the examinee
  • Access to personal drive (S-drive) on CBS' network
  • USB key to upload your notes before the exam
  • Any calculators
  • All dictionaries
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Course content and structure

There is an increasing interest in private equity (PE) investments in privately-held companies, i.e., companies that are not listed and traded on an exchange. Typical examples are investments by venture capital (VC) funds in entrepreneurial start-ups and investments by buyout funds in more mature and established companies. 


Investments in such private companies differ fundamentally from investments in traditional capital markets, such as the market for publicly-traded companies, which are typically considered in standard corporate finance. For example, start-ups are young, mostly unprofitable companies, with short operating histories and little capital. Investments in such young companies involve very high degrees of risk and uncertainty, making them difficult to value using traditional methods. As another example, investments in private companies are typically negotiated on a case-by-case basis, where different investors have different ways to add value, and where investments are highly illiquid, meaning that the standard assumptions of liquid and efficient capital markets where funds are supplied elastically at the risk-adjusted rate no longer appropriate. 


The course covers the organization and structure of PE investors and their investments, ranging from the limited partners, typically large institutional investors such as pension funds, that provide the capital to the PE funds and all the way to the underlying portfolio companies, such as entrepreneurial start-ups, that receive the capital at the end.  The main focus is on understanding individual deals, i.e., an investment by a PE fund into a portfolio company, including the valuation of the deal, the structure of the investment, and the various implications of the deal for the company and the investor. 

Teaching methods
This course is taught using a combination of cases, lectures, and guest speakers, with an emphasis on case discussions in the class. Students should expect to spend a substantial amount of time preparing the cases before the class discussions, and they should expect to participate actively in the discussions to get the full benefit of the course.
Student workload
Teaching 33 hours
Preparation 99 hours
Exam (incl. preparation) 74 hours
Expected literature

Various case studies and lecture notes.

Last updated on 12-04-2016