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Course 2015-2016 a.y.

30186 - VENTURE AND DEVELOPMENT CAPITAL


CLEAM - CLEF - CLEACC - BESS-CLES - BIEMF
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:
CLAUDIO ZARA

Classes: 31 (I sem.)
Instructors:
Class 31: CLAUDIO ZARA


Course Objectives
Students who attend this course will 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 2014 in the US venture capital firms invested around US$ 18 billion in around 2,400 companies. The learning goals are as follows:
  • how the fundamental financial theories work and differ 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.


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 organization (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, portfolio leverage and exit way).
  • Investment valuation: business plan and business forecast.
  • Investment valuation: valuation criteria, expected IRRs and investment decision.

Detailed Description of Assessment Methods
For attending students :
the assessment process is divided in three parts: a) mid-term and final-term tests hand out during the course (multiple choice questions, weight 50%); b) group assignments and other class activities (weight 40%); c) class participation and attendance (weight 10%).

For non-attending students :
or attending students who did not take, or pass, the tests there is one final exam (a mix between multiple choice and open questions).

Textbooks
  • J.K. Smith, R.L. Smith,R.T. 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 web site.

Prerequisites

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 11/06/2015 12:07