Course 2014-2015 a.y.



Department of Finance

Course taught in English

Go to class group/s: 31
CLEAM (6 credits - I sem. - OP  |  3 credits SECS-P/09  |  3 credits SECS-P/11) - CLEF (6 credits - I sem. - OP  |  3 credits SECS-P/09  |  3 credits SECS-P/11) - CLEACC (6 credits - I sem. - OP  |  3 credits SECS-P/09  |  3 credits SECS-P/11) - BESS-CLES (6 credits - I sem. - OP  |  3 credits SECS-P/09  |  3 credits SECS-P/11) - BIEMF (6 credits - I sem. - OP  |  3 credits SECS-P/09  |  3 credits SECS-P/11)
Course Director:

Classes: 31 (I sem.)

Course Objectives

Students who attend this course learn what the characteristics and main issues affecting venture and development capital activity are. This industry is increasingly gaining relevance both in the field of firm financing and as an asset class in investment portfolios. In 2012 in the US venture capital firms invested more than US$ 18 billion in around 3,00 companies. The learning goals are as follows:
  • how the fundamental financial theories work in the venture capital industry;
  • venture capital as an asset class and its investor categories;
  • which are the target companies venture capitalists wish to invest in;
  • management of the investment process, target valuation and monitoring. the way out.

Course Content Summary

  • What is Venture Capital and because it exists.
  • Venture and development capital: an industry overview.
  • Investor categories who place funds in venture capital industry (financial investor, corporate venture capital, government and local authorities, informal investors).
  • How to regulate relationships between general and limited partners within investors organisation (incentives schemes, disclosure and accountability, how to share profits between parties).
  • How to invest: legal framework, strategies and vehicles.
  • What makes venture capital target firms special and when and why they are not able to raise capital in the debt market.
  • Solutions from venture capitalists to firm needs. Relationships between entrepreneur and investor.
  • Investment criteria and investment styles (round financing, milestones, venture debt).
  • Investment valuation: business plan, deal structuring, valuation criteria and expected IRRs.
  • Management of the way out: how and when to exit from the investment.

Detailed Description of Assessment Methods

For attending students

The assessment process is divided into three parts:
  • check tests hand out during the course on a regular base (multiple choice questions, weight 40%);
  • a final exam (a set of open questions, weight 60%);
  • a group assignment (an option to obtain extra points – a maximum of 4).

The grade from the check tests can be used only once within the February exam date. The grade from the assignment expires at the end of the current academic year.

For non attending students

Either attending students who did not take, or pass, the check tests there is one final exam (a mix between multiple choice and open questions).
Three different methods: monitoring activity during the course attendance, written exam at the end of the course (compulsory) and group assignment.


  • J. Smith, R. Smith, R. Bliss, Entrepreneurial Finance. Strategy, Valuation and Deal Structure, Stanford University Press, 2011, (only some sections).
  • Some working papers/case histories distributed on the course e-learning website.
Exam textbooks & Online Articles (check availability at the Library)


It is suggested that students, although this is not compulsory, either have attended or are attending the basic courses in Financial System and Corporate Finance in order to fully exploit the value of the course.

Last change 14/04/2014 16:03