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2022/2023  BA-BHAAV2262U  Entrepreneurial Finance

English Title
Entrepreneurial Finance

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration One Quarter
Start time of the course Second Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Toke Reichstein - Department of Strategy and Innovation (SI)
Main academic disciplines
  • Entrepreneurship
  • Finance
Teaching methods
  • Face-to-face teaching
Last updated on 11-02-2022

Relevant links
Learning objectives
  • Assess financially an entrepreneurial venture
  • Estimate the value of a nascent firm/newly established firm
  • Understand the difference between the funder’s perspectives and those of the company being financed
  • Account for how various sources of financial resources differ (venture capital, business angle capital, private equity, early stage, crowdfunding and traditional financing sources)
  • Estimate the optimal timing in terms of obtaining funding and when to go public
  • Account for the conditions under which newly established firm are financed by a venture capitalists. Both from the funder and the receivers side of the market
  • Account for the elementary aspects pertaining to crowdfunding
  • Report on the various principle-agent aspect that are central to the fonder-funder relationship and how such associations tend to play out
  • Discuss how funders may assist founders in more ways than by providing capital injections and discuss how funders may have an impact on startup performance
Course prerequisites
The course is offered to bachelor students in the 5th semester as an elective regardless of study line. It can be chosen as a stand-alone elective or as part of the three courses Minor in Entrepreneurship consisting of Entrepreneurial Finance, Entrepreneurial Strategy and Business Planning and Business Models. The course builds on the principles of finance. And it is complementary to the other courses in the minor. Students with insights in quantitative analysis may gain more form this course.
Examination
Entrepreneurial Finance:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
The exam is a multiple choice. You are given two hours to complete the multiple choice. It is based on some regular multiple choice questions and some multiple choice based on financial statements which students need to use for calculating some values and choosing the right number among a number of possible. Students will be given an exercise during the course, which will resemble that of the exam. Solutions to that will also be circulated.
Assignment type Multiple choice
Duration 2 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Winter
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.
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, structure and pedagogical approach

Course Description:
Entrepreneurship often involves a number of challenges characterized by risk and uncertainty, that need considerations pertaining to finance. These financial challenges especially represent a hurdle for entrepreneurs in high-tech settings. Securing funding and establishing the financial resources to undertake an entrepreneurial venture is more often than not one of the main activities to undertake when establishing a new firm. Startup investors are also in need of assessing and understanding the financial aspects of potential investment opportunities vis-à-vis nascent entrepreneurs or newly established firms. Furthermore, there are substantial managerial challenges pertaining to finance that need to be considered in entrepreneurial settings. This course provides insight in these aspects of the entrepreneurial process.

 

Course Contents:

This course offers tools and insights that help entrepreneurs or their investors 
navigate through these challenges. Especially, the course will aim to provide 
answers to questions like; how much money is needed for establishing the 
business; what type of investor is optimal for the business; when should the 
money be raised; what is the value of the newly founded firm; how should 
entrepreneurs think about exiting; What are the benefits of having an investor associated; Why do some investors choose to syndicete.
Description of the teaching methods
Teaching methods:
The pedagogical method is a combination of lectures, cases, and exercises. A satisfactory high outcome of the exercises requires an active participation that is coupled with the studied literature. The exercises are an integrated part of the learning process. A large art of the course relies heavily on academic publications making use of quantitative investigations.
Feedback during the teaching period
Solutions to exerices are provided on canvas.
There will be reserved time during lectures for questions regarding solutions.
Student workload
Lectures and exercises: 166 hours
Exam: 40 hours
Further Information

Mixture of two and three hour lectures. Some of which will discuss solutions to exercises 
Expected literature

Belleflamme, P., Lambert, T., & Schwienbacher, A. (2014). Crowdfunding: Tapping the right crowd. Journal of business venturing, 29(5), 585-609.

 

Leach, J. C., & Melicher, R. W. (2017). Entrepreneurial finance. 6th edition, Cengage Learning.

 

Mollick, E. (2014). The dynamics of crowdfunding: An exploratory study. Journal of business venturing, 29(1), 1-16.

 

Chen J. and Løntoft M., Forthcoming and will be uploaded when ready.

 

Metrick, A. and Yasuda, A. (2011). Venture Capital and the Finance of Innovation, 2nd edition, Wiley and Sons (chapter 10)

 

Kaplan, S. and Strömberg, P. (2005). Characteristics, Contracts and Actions: Evidence from Venture Capitalist Analyses, Journal of Finance vol. 59

 

Hellmann, T. (2006). IPOs, Acquisitions, and the use of Convertible Securities in Venture Capital, Journal of Financial Economics vol. 81
Last updated on 11-02-2022