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Prospectus

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Entrepreneurial Finance

Course
2021-2022

Admission requirements

Mandatory: Financial Management. Students must be familiar with NPV, IRR, Ke and WACC.

Description

This is an advanced training activity for scientists and technologists seriously considering the launch of a science-based business venture. The course discusses (a) how to determine the amount of funding needed to start the venture; (b) valuation of the business opportunity; and (c) negotiation of financial terms with venture capitalists and buyers of innovative technologies.

Course objectives

Knowledge of how to . . .

  • Estimate the amount of funding required by a science-based business venture

  • Calculate the economic value of the venture opportunity

  • Negotiate terms of investment with venture capitalists and private equity funds

  • Negotiate financial terms with companies that acquire innovative technologies

  • Proficiently use simulation software to gauge the risks associated with a new venture

Topics

  • Estimation of first-round funding needs for an innovative biomedical device

  • Calculation of economic value and risk analysis of the launch of a new tablet

  • Prototyping long-term cashflows for a software startup and negotiation with an angel investor from the entrepreneur’s perspective

  • Valuing a biotechnology startup in an emerging market and negotiation of investment terms from the venture capitalist’s perspective

  • Valuation of a pharmaceutical patent and negotiating its sale to a large company, involving complex optimization and simulation techniques

Timetable

Check MyTimetable and use your ULCN account to login.

You will find the timetables for all the courses and degree programme in MyTimetable. This enables you to create a personal timetable. Any teaching activities that you have registered for in uSis will automatically be displayed in your timetable. Any timetables that you add will be saved and automatically displayed the next time you sign in.

Detailed table of contents can be found in Brightspace.

Mode of instruction

The course has been designed as a workshop—fully case-based and highly practical: there are no theory lectures. All sessions will be devoted to solving case studies. Students will be able to download course materials (cases and accompanying Excel spreadsheets) from the course website.

The classroom is a shop-floor and the course is work-intensive: students are expected to bring their laptops to each class and solve the spreadsheet models during the sessions. Students without laptops, and those not observed to work on the spreadsheets, will be considered absent from class by the instructor.

For the first session, students should already have the Crystal Ball (CB) simulation software in their laptops. Download your CB Student Trial Version, Classroom Edition, from Oracle’s website (http://www.oracle.com). The specific link to CB is volatile, so do your own search. It is wise to use your university e-mail address to perform the download. If you have a Mac, try following the instructions sitting in: https://kenan-flagler.instructure.com/files/18898833/download?verifier=lSoTCfY2g7LuuuZV3ZzsZtYOEdvXyJfYFGKUjABf); if you are still unable to download CB in your Mac, team up with someone that works with MS Windows. Warning: The CB trial version will work only for two weeks, so do not download it until the course is about to start.

Students must assemble in teams (5 per team) and try to solve all cases in advance (except the first one). Write-ups for each case (except the first one) are mandatory. All case solutions must be team-based. Students should send their team-based solutions as Excel spreadsheets to the instructor within 24 hours of the moment the class discussion of the incumbent case ends.

Assessment method

  • 20%: Class participation: “show up, follow the instructor’s explanations, ask interesting questions, construct spreadsheets during class”;

  • 50%: Team solutions to Cases #2 (Kindle Fire), 3 (Tensile Technologies) and #4 (FIDE Capital); solutions must be delivered (in Excel format) during the day following the session in which the case is discussed. Please send your solutions to: lpereiro@utdt.edu, specifying in the body of your e-mail the names of the team participants.

  • 30%: Final Exam. Team solution to Case #5 (Bioceleris-Takeda). Please send your team solution to: lpereiro@utdt.edu as an Excel spreadsheet during the day following the session in which the case is discussed.

Reading list

Some supplementary (optional) readings (no need to buy them):

  • Pereiro, L.E., 2002, Ch.7: Valuation of Technology Companies; in: Valuation of Companies in Emerging Markets: A Practical Approach, New York: Wiley.

  • Berkery, D., 2007, Raising Venture Capital for the Serious Entrepreneur, New York:McGraw-Hill.

Registration

You need to do two steps:
1. Fill in this link;
2. Sign up for classes and examination in uSis (in time).

There is only limited capacity for external students. Please contact the programme Co-ordinator

Contact

For all your questions you can contact info@sbb.leidenuniv.nl

Note: If you are an ICTiBPS student, you can contact the programme coordinator of ICTiBPS for any questions about your program.

Remarks

  • Students are responsible for enrolling/unenrolling themselves for (partial) exams/retakes.

  • Students are responsible for enrolling themselves for (partial) exams/retakes.

  • The deadline for enrolling for an exam/retake is 14 calendar days before the exam/retake takes place (exam date - 14 = deadline enrolling date).

  • Students who do not enroll themselves for an exam/retake by the deadline are not allowed to take the exam/retake.

  • Students fail the course if any of the partial components (except the exam) that make up the final mark of the course is assessed below 4.0.

  • Students fail the course if the grade for the (final) exam is assessed below 5.0.

  • The final grade is expressed as a whole or half number between 1.0 and 10.0, including both limits. The result is not to be expressed as a number between 5.0 and 6.0.

  • If one of the components of the final mark constitutes a component that assesses attendance or class participation, students cannot take a retake for this component. Therefore, students fail the course if their mark for this component is less than 4.0.

  • Partial grades, inclusive the exam grade will not be rounded. If partial grades will be communicated, it is possible partial grades are rounded, but unrounded partial grades will be used in the calculation of the final grade. The final grade will be rounded at 0.5 (5.49 will rounded down to a 5 and a 5.5 will be rounded up to a 6.0).

  • It is not possible to do retakes for group assignments. Therefore, if students fail the group assignment component, they fail the course.

  • Students pass the course if the final mark is 6.0 or higher (5.49 will rounded down to a 5 and a 5.5 will be rounded up to a 6.0).

  • For courses, for which class participation is an assessment component, students may not be penalised for an absence if the student has a legitimate justification for this absence. The student must notify the program coordinator via email (info@sbb.leidenuniv.nl) of such an absence BEFORE the lecture, describing the reason for missing the lecture. If the student does not notify the program coordinator before the lecture, the student will be penalised. Students may be required to provide further documentation to substantiate their case, and class attendance requirements are only waived under exceptional circumstances such as illness.

  • Students who are entitled to more exam/retake time must report to info@sbb.leidenuniv.nl 10 days before the exam/retake takes place.