Course 2008-2009 a.y.

Course Objectives

The aim of the course is to provide students with a deep understanding of the role played by the financial market, and in particular by financial intermediaries, in the creation of new firms, in fostering the development of innovation as well as the commercialization of new business ideas. Particular attention is dedicated to the role played by venture capital.

The second part of the course examines business plans, financial planning and the valuation of entrepreneurial firms. The importance of strategy in new venture planning is stressed to help develop a successful business plan for a new venture. You'll learn to think of new ventures as portfolios of real options, value high-growth firms, R&D-intensive investments and firms with negative cash flows.

Course Content Summary

• The sources of entrepreneurship
• The life cycle of the firms and their different financial needs:
• Entrepreneurial Finance
• Venture Capital
• The Interaction between Product Market and Financing Strategy
•  IPO and the effect of going public
• Financial contracting theory and applications
• The Business Plan
• Financial Forecasting
• Valuation of Entrepreneurial Firms General Tools
• Applications

Detailed Description of Assessment Methods

There will be a written exam at the end of the course.

Textbooks

• J.K. SMITH, L. SMITH,  Enterpreneurial Finance, JOHN WILEY & Sons Inc., 2nd edition, 2004.
• ASWATH DAMODARAN, Investment Valuation: Tools and Techniques for Determinig the Value of Any Asset, JOHN WILEY & Sons Inc, University edition, 2Rev Ed edition, 28 Feb 2002.
• Selected papers and working papers to be presented in class.

Prerequisites

In order to successfully attend and complete this course, students are expected to know the basics of:

• descriptive and inferential statistics (mean, standard deviation, correlation, variance-covariance matrices, main statistical distributions, linear multivariate regressions, etc.);
• investments (bond duration and convexity, capital asset pricing model, etc.);
• derivatives (basic concepts related to forward transactions, options, futures, etc.).