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2021/2022  KAN-CCMVV2427U  Financing Innovation and Entrepreneurship

English Title
Financing Innovation and Entrepreneurship

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration One Quarter
Start time of the course First Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Ali Mohammadi - Department of Strategy and Innovation (SI)
Main academic disciplines
  • Entrepreneurship
  • Finance
  • Innovation
Teaching methods
  • Blended learning
Last updated on 15-02-2021

Relevant links

Learning objectives
On successful completion of the course students should be able to:
  • Explain the theoretical differences between R & D investment and capital investment.
  • Understand and compare different types of innovation investments (internal R &D, Corporate venture capital, joint venture, R & D Subsidies, etc.).
  • Understand the interaction between financial markets (e.g. analysts, shareholders, etc.) and firm investment in innovation.
  • Become familiar with some tools to select innovation projects.
  • Understand and compare various financial sources available to different types of start-ups.
  • Conduct a financial valuation of a start-up firm and apply it in real cases.
  • Understand and explain possible reasons for the biases in entrepreneurial finance market.
  • Demonstrate the ability to make recommendations for firms based on arguments that are sensible, logical and coherent.
Examination
Financing Innovation and Entrepreneurship:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Autumn
Aids Limited aids, see the list below:
The student is allowed to bring
  • Any calculator
  • Language dictionaries in paper format
The student will have access to
  • Advanced IT application package
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.
Description of the exam procedure

Exam will include essay questions based on theories and cases, which will be provided to students

Course content, structure and pedagogical approach

Course Description:

Innovation and entrepreneurship are engines of economic growth and job creation. They are also key driver of firms’ future competitiveness and productivity. Financing R&D projects differs from financing other types of projects such as capital investments. This is mostly due to high uncertainty associated with R & D projects and outcome of them.  In addition, well-functioning financial markets can nurture technological innovation through two channels. First financial markets can allocate capital to the most promising projects or firms with the greatest potential to develop and commercialize new technologies. Second, financial markets can influence the direction of innovation and shape the nature of R&D that is undertaken by firms. This course will focus on relationship between financing and innovation in both established firms and innovative entrepreneurial ventures.

 

Course Contents:

The course will be delivered in two parts.

  1. In the first part, we will focus on large established firms. In this part, we discuss:
    1.  Different types of innovation investments (internal R & D, Corporate venture capital, joint venture, etc.).
    2. The interaction between financial markets (e.g. analysts, shareholders, etc.) and firm investment in innovation.
    3. Some tools to evaluate and compare investment opportunities in innovation projects.
  2. In the second part, we will focus on innovative entrepreneurial ventures. This section aims to provide an overview of:
    1.  Funding sources for new ventures (e.g. venture capital, Angels, Crowdfunding, Initial coin offering) and implications of different types of investors.
    2. Methods of financial valuation of a start-up firm,
    3.  The structure of financial contracts between entrepreneurs and external investors
    4. Biases in entrepreneurial finance market.

The course is relevant for students planning to become entrepreneurs, or working in high tech sector, investment firms, private equity firms, public institutions supporting innovation and entrepreneurship, and consulting.

Description of the teaching methods
This course is conducted based on a combination of research-based lectures, case discussions and guest lectures.
Feedback during the teaching period
Feedbacks are provided during case discussions, Q&A time in class, and office hours.

Students can deliver voluntary assignments to receive feedback.
Student workload
Class attendance 33 hours
Preparation and exercises 99 hours
Exam 74 hours
Expected literature

Reading materials include book chapters, research articles, and case studies. For each lecture, teacher will provide additional supplementary readings.

Books:

  • Andrew Metrick, Ayako Yasuda, 2011. Venture capital and the finance of innovation, 2nd ed. Chapter 19-24.
  • Da Rin & Hellmann's Fundamentals of Entrepreneurial Finance. Oxford University Press.

Research articles :

  • Bronwyn H. Hall, Josh Lerner, Chapter 14 - The Financing of R&D and Innovation, Editor(s): Bronwyn H. Hall, Nathan Rosenberg, Handbook of the Economics of Innovation, North-Holland, Volume 1, 2010, Pages 609-639, ISSN 2210-8807, ISBN 9780444519955,
  • Ramana Nanda & William R. Kerr, 2015. "Financing Innovation," Annual Review of Financial Economics, Annual Reviews, vol. 7(1), pages 445-462
  • Ramana Nanda, Matthew Rhodes-Kropf, 2017, Financing Risk and Innovation, Management Science. Vol. 63, No. 4, April 2017, pp. 901–918.
  • Ewens, M., & Townsend, R. R. (2019). Are early stage investors biased against women? Journal of Financial Economics.
  • Belleflamme, P., Lambert, T., & Schwienbacher, A. (2014). Crowdfunding: Tapping the right crowd. Journal of business venturing, 29(5), 585-609.

Cases :

  • Case study material is available in a course package from HBS. The link to the course package will be provided in the beginning of the course.
Last updated on 15-02-2021