| Learning objectives |
On successful completion of the course students
should be able to:
- Understand and compare different types of innovation
investments (internal R &D, Corporate venture capital, joint
venture, R & D Subsidies, etc.).
- Explain the theoretical differences between R & D
investment and capital investment.
- 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. and possible exit scenarios
- 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.
- Evaluate the consequences of terms in the contracts between
entrepreneur and investor
- 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
The number of registered candidates for the make-up
examination/re-take examination may warrant that it most
appropriately be held as an oral examination. The programme office
will inform the students if the make-up examination/re-take
examination instead is held as an oral examination including a
second examiner or external examiner.
|
Description of the exam
procedure
Exam will include essay and calculation 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.
- In the first part, we will focus on large established firms. In
this part, we discuss:
- Different types of innovation investments (internal R
& D, Corporate venture capital, joint venture, etc.).
- The interaction between financial markets (e.g. analysts,
shareholders, etc.) and firm investment in innovation.
- Some tools to evaluate and compare investment opportunities in
innovation projects.
- In the second part, we will focus on innovative entrepreneurial
ventures. This section aims to provide an overview of:
- Funding sources for new ventures (e.g. venture capital,
Angels, Crowdfunding, Initial coin offering) and implications of
different types of investors.
- Methods of financial valuation of a start-up firm,
- The structure of financial contracts between
entrepreneurs and external investors
- 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.
Pre-recorded lectures will be provided for some of the
topics. |
| 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,
lecture slides 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 20, 21 & 23.
- Da Rin & Hellmann's Fundamentals of Entrepreneurial
Finance. Oxford University Press.
Research articles
:
- Ramana Nanda & William R. Kerr, 2015. "Financing
Innovation," Annual Review of Financial Economics, Annual
Reviews, vol. 7(1), pages 445-462
- Guo, B., D. P´erez-Castrillo, and A. Toldr`a-Simats (2019).
Firms’ innovation strategy under the shadow of analyst coverage.
Journal of Financial Economics 131 (2), 456–483.
- Gompers, Gornall, Kaplan, and Strebulaev (2021), How Venture
Capitalists Make Decisions, Harvard Business Review.
- Ewens, M., & Townsend, R. R. (2019). Are early stage
investors biased against women? Journal of Financial
Economics.
- Additional research articles will be provided for each
lecture
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.
Slides
:
- Slides provided by teacher will be part of the exam
material.
|
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