Venture capital (2235.YR.015108.1)
General information
Type: |
OPT |
Curs: |
1 |
Period: |
S semester |
ECTS Credits: |
3 ECTS |
Teaching Staff:
| Group |
Teacher |
Department |
Language |
| Year 1 |
Marti Guasch Mercadé |
Economía, Finanzas y Contabilidad |
ENG |
Previous Knowledge
Basic understanding of corporate finance and accounting will be expected from students (e.g., time value of money, financial forecasting, income statements, valuation methodologies, discount factors,...).
COURSE CONTRIBUTION TO PROGRAM
The course is very integrative and will be based in knowledge built in other courses of the Master in Finance. The course provides a first approximation to the world of Venture Capital and Private Equity (VCPE) as an alternative asset class. Hence, the course tailors traditional (corporate) finance techniques to the case of private companies (e.g., screening, valuation, negotiation of deals, etc.).
While the course focuses on Venture Capital funds (VCs), it provides ample examples/cases/lectures/guest speakers of later stage transactions (i.e., PE Buyouts and MBOs/MBIs), as their functioning/incentives are identical to that of VCs.
Course Learning Objectives
The objective of the course is to understand the insights of the venture capital (VC) and private equity (PE) industry. Participants will be involved in the 'venture capital cycle' process, which can be divided in three main stages: fundraising (the fund), investing and exiting. Alongside this journey, we will also review the important tasks of structuring the deal and negotiating key clauses, both from the (entrepreneurial) management team and the investors' standpoints. Finally, we will introduce private equity buy-outs: leveraged buy-outs (LBOs) and management buy-outs (MBOs).
All these will lead us to work with fundraising documents, financial plans, valuation and contracting information (especially the term sheet and shareholders' agreement), and to analyse the different exit options that maximize the investment Internal Rate of Return (IRR).
Methodology
Classes will have a strong focus on practical content, and will combine discussion of cases, illustration of key theoretical concepts and presentations. The course requires to prepare assigned readings from textbook and cases at home. During class time we will focus on discussing issues and learning from cases and guest speakers.
ASSESSMENT
ASSESSMENT BREAKDOWN
| Description |
% |
| Class Participation |
20 |
| Group Assignments |
50 |
| Individual assignments |
30 |
Assessment criteria
Grading Policy:
Class Participation 20%
Group Assignments 50%
Individual assignments 30%
- Group Assignments: Participants will be divided in groups and will work in different cases and in two specific assignments (mid-term and final). Assignments have a very practical focus and integrate the learning of the course. Group participation will be peer-reviewed.
- Individual Test
- Participation in class will be based on quality not quantity. Class attendance is mandatory, and more than one absence will negatively affect your grade. PLEASE, INFORM YOUR TEACHER IF YOU ARE PLANNING TO MISS A CLASS AS SOON AS POSSIBLE.
- Individual Assignments
In case a retake exam is needed, the grade will be 100% determined by the retake exam grade.
Bibliography
Main textbook:
Alemany, L. and Andreoli, J.J. (2018). Entrepreneurial Finance. The Art and Science of Growing Ventures. Cambridge University Press.
Other references:
- Bygrave, W., Hay, M. & Peeters, J. (1999) "The Venture Capital Handbook?. Prentice Hall
- Campbell, K. (2003). Smarter Ventures. A survivor's guide to venture capital through the new cycle. Pearson Education
- Gompers, P.A., Gornall, W., Kaplan, S.N., and Strebulaev, I.A. (2020). How do venture capitalists make decisions? Journal of Financial Economics, vol 135, p169-190.
- Gompers, P.A., Kaplan, S.N. and Mukharlyamov, V. (2016). What do private equity firms say they do? Journal of Financial Economics, vol 121, p449-476
- Kocis, J.M et al. (2009) "Inside Private Equity: The Professional Investor's Handbook?. John Wiley & Sons.
- Merril, R.E. and Nichols, G.E. (1990). Raising Money: Venture funding and how to get it. Amacom Books.
- Sharp, G. (2002). Buy Outs: A guide for the Management Team. Euromoney Institutional Investor.
- Wilmerding, A. (2006) "Term Sheets and Valuations? - Aspatore Books
Timetable and sections
| Group |
Teacher |
Department |
| Year 1 |
Marti Guasch Mercadé |
Economía, Finanzas y Contabilidad |
Timetable Year 1
From 2024/4/30 to 2024/6/4:
Each Tuesday from 16:45 to 18:15.
Each Tuesday from 15:00 to 16:30.
Each Tuesday from 18:30 to 19:30.
Tuesday 2024/6/11 from 15:00 to 18:15.
