JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD

Course Objective:

• To highlight the importance of Entrepreneurial Finance.
• To elucidate how companies Organize and Operate the Venture.
• To impart knowledge of various aspects in financial planning.
• To provide understanding of various aspects in venture valuation.
• To discuss the aspects of financing the growing ventures.

Course Outcome

Students will be able to:

• Understand Financing through venture lifecycle in a company.
• Learn Startup and First Round Financing Sources.
• Learn the significance of Financial Planning throughout the Venture’s life cycle.
• Understand Mechanics of venture valuation.
• Understand the importance of venture capital financing.

UNIT - I: Finance for Entrepreneurs

Principles of Entrepreneurial Finance, Role of Entrepreneurial

Finance, The Successful Venture Lifecycle, Financing through Venture Lifecycle, Lifecycle Approach for Teaching, Entrepreneurial Finance. Developing Business Idea, Business Model. Screening Venture Opportunities: Pricing / Profitability Considerations, Financial / Harvest Considerations. Financial Plans and Projections.

UNIT - II: Organizing and Operating the Venture

Financing a New Venture, Seed, Startup and First

Round Financing Sources, Financial Bootstrapping, Business Angel Funding, First Round Financing Opportunities. Preparing and Using Financial Statements: Obtaining and Recording the Resources to Start and Build a New Venture, Asset and Liabilities and Owners Equity in Business, Sale Expenses and Profits Internal Operating Schedules, Statement of Cash Flows, Operating Breakeven Analysis. Evaluating Operating and Financial Performance using Ratio Analysis.

UNIT - III: Financial Planning

Financial Planning throughout the Venture’s Lifecycle, Short Term Cash

Planning Tools, Projected Monthly Financial Statements. Types and Costs of Financial Capital: Implicit and Explicit Financial Capital Costs, Financial Markets, Determining the Cost of Debt Capital, Investment Risk, Estimating the Cost of Equity Capital, Weighted Average Cost of Capital.

UNIT - IV: Venture Valuation

Valuing Early-stage Ventures, Venture Worth, Basic Mechanics of

Valuation, Developing the Projected Financial Statements for a Discounted Cash Flow Valuation, Accounting Vs Equity Valuation Cash Flow. Venture Capital Valuation Methods: Basic Venture Capital Valuation Method, Earnings Multiplier and Discounted Dividends.

UNIT - V: Financing for the Growing Venture

Professional Venture Capital, Venture Investing Cycle,

Determining the Fund Objectives and Policies, Organizing the New Fund, Soliciting Investments in the new Fund, Capital Call, Conducting Due-diligence and Actively Investing, Arranging Harvest or Liquidation, Other Financing Alternatives: Facilitators, Consultants and Intermediaries, Banking and Financial Institutions, Foreign Investors, State and Central Government Financing Programmes. Receivables Lending and Factoring, Mortgage Lending, Venture Leasing.

Suggested Readings:

• Leach, Melicher, Entrepreneurial Finance, South-Western College Pub,5e, 2022.
• Marco Da Rin Thomas Hellman, Fundamentals of Entrepreneurial Finance, Oxford Publishers, 1e, 2020.
• M J Alhabeeb, Entrepreneurial Finance: Fundamentals of Financial Planning and Management for Small Business, Wiley, 2015.
• Steven Rogers, Entrepreneurial Finance: Finance and Business Strategies for the Serious Entrepreneur 3e, Tata Mc Graw Hill, 2014.
• Douglas Cumming, Entrepreneurial Finance, Oxford University Press, 2012.
• Philip J. Adelman, Alan M. Marks, Entrepreneurial Finance, 5e, Pearson, 2011.  58 MBA ENTREPRENEURSHIP ELECTIVE