Course 2011-2012 a.y.

Course Objectives

The aim of the course is to provide students with a deep understanding of the role played by the financial system in the creation and financing of new firms.
The first part of the course focuses on the Venture Capital (VC) industry and its investment decision process from the financial investor’s point of view. You'll learn how to assess the forecast inside the business plan in order to assess both capital requirement and cash capacity. Furthermore, you’ll understand how to evaluate a new business, considering both the entrepreneur’s and outside investor’s points of view, and what is important for venture capitalists in order to decide to enter the investment.
The second part of the course fosters the knowledge of the role played by the financial intermediaries, and in particular by the venture capitalists, 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 contractual relation between VCs and entrepreneurs.

Course Content Summary

• The VC Industry: a survival kit
• The role of business plan for venture capitalists
• Valuation theory and valutation practice for an outside investor
• Valuation for Not/Partially Diversified Investors and Investment Decisions
• 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

Detailed Description of Assessment Methods

The exam is written. Students can attend the mid term exam on the first part of the course.

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.);
• corporate finance theory and practice (i.e. Capital Asset Pricing Model, IRR, NPV, etc.).

<testo da aggiungere qui> Students graduated at a non Bocconi University must attend the pre course of Corporate Finance (taught in English, before the beginning of the Fall Term). Bocconi graduates are suggested to attend the same pre course. Only Bocconi graduates in CLEF can avoid attending the pre course.

Textbooks

• Entrepreneurial Finance, by J. K. Smith and R. L. Smith, John Wiley & Sons Inc, 2^nd Edition (2004)
• Some topics will be covered by case histories/working papers that will be distributed through the Personal Agenda.

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.);
• corporate finance theory and practice (i.e. Capital Asset Pricing Model, IRR, NPV, etc.);